Mortgage calculator
Free mortgage calculator. See your monthly payment, total interest paid, and how much you'd save with extra monthly payments — instantly.
How mortgage payments work
A mortgage payment is calculated using the amortization formula. Early payments are mostly interest; later payments are mostly principal. On a $300,000 mortgage at 6.5% for 30 years:
- Year 1: ~$19,400 goes to interest, only $3,350 to principal
- Year 15: split roughly 50/50
- Year 30: almost entirely principal
This is why extra payments early in the loan are dramatically more valuable than extra payments late. An extra $100 in year 1 reduces the principal that all future interest is calculated on for 29 more years.
Extra payment impact (on a $300k, 6.5%, 30-year mortgage)
- $0 extra: $682,633 total paid, $382,633 in interest
- $100/month extra: $621,000 total, pays off 4.5 years early. Saves $61,000
- $200/month extra: $591,000 total, pays off 7 years early. Saves $91,000
- $500/month extra: $520,000 total, pays off 13 years early. Saves $163,000
- $1,000/month extra: $460,000 total, pays off 18 years early. Saves $222,000
30-year vs 15-year mortgage
Same $300,000 loan at historical average rates:
- 30-year at 6.5%: $1,896/month, $382,633 total interest
- 15-year at 5.75%: $2,492/month, $148,587 total interest
15-year saves $234,000 in interest but costs $596/month more. If you can afford the higher payment, 15-year wins. If cash flow is tight, 30-year with aggressive extra payments is often optimal — you get 80% of the savings with 100% of the flexibility.
Beyond P&I: the full cost of home ownership
Your mortgage payment isn't the full cost. Budget for:
- Property tax: 0.5-2.5% of home value annually, varies dramatically by state (TX, IL, NJ are highest)
- Homeowners insurance: $1,200-$2,500/year depending on location and coverage
- PMI: if you put less than 20% down, ~0.5-1% of loan annually until equity hits 20%
- HOA: $100-$500/month if applicable
- Maintenance: budget 1-2% of home value per year (often ignored, always hits)
A $1,896 mortgage payment is often $2,500-$3,000+ in actual monthly housing cost.
Should I pay off my mortgage early or invest?
Depends on your mortgage rate:
- Rate under 5%: invest extra money instead. Historical stock returns (~8-10%) beat the guaranteed rate of payoff
- Rate 5-7%: split — some extra payments, some investing
- Rate 7%+: aggressive payoff makes sense. Beating 7% in investments is harder than it sounds
There's also a behavioral argument: paid-off mortgage = psychological freedom. Some choose payoff even when math favors investing.