calculation mode
Mortgage Payment Calculator
Calculate your estimated monthly Principal and Interest (P&I) payment for a mortgage.
Click to show tips
Try an Example
Pick a scenario to see how the calculator works, then adjust the values
Mortgage Payment Calculator | Estimate P&I Payments
Calculate your estimated monthly Principal and Interest (P&I) payment for a mortgage.
Key values: $350,000 price · $70,000 down · 7.25% rate · 30 years
$250,000 Condo — 5% Down, 15-Year Fixed
Choosing a shorter loan term to build equity faster on a smaller property.
Key values: $250,000 price · $12,500 down · 6.75% rate · 15 years
The Monthly Payment Formula
For a loan of at annual rate over months:
This is the annuity formula — it calculates the fixed monthly payment that fully repays the loan plus interest over the term.
Worked Example
$300,000 loan at 6.5% for 30 years ( months):
How Amortization Works
Each monthly payment splits into interest and principal. Early in the loan, most goes to interest:
| Payment # | Interest | Principal | Balance |
|---|---|---|---|
| 1 | $1,625 | $271 | $299,729 |
| 12 | $1,609 | $287 | $296,669 |
| 180 | $1,149 | $747 | $211,749 |
| 360 | $10 | $1,886 | $0 |
Over 30 years at 6.5%, total payments = $682,633 — meaning $382,633 is interest (128% of the original loan).
The Impact of Extra Payments
Adding $200/month extra to the $300,000 example above (6.5%, 30-year) saves approximately $112,000 in total interest and pays off the loan 7 years early. Extra payments go entirely to principal, reducing the balance that interest is calculated on — a compounding savings effect.
PMI: Private Mortgage Insurance
If your down payment is less than 20%, lenders typically require PMI, which adds 0.5–1.5% of the loan amount annually to your payment:
PMI can be removed once you reach 20% equity (80% loan-to-value ratio). This creates an incentive to reach the 20% threshold as quickly as possible.
Frequently Asked Questions
How is a monthly mortgage payment calculated?
The monthly payment uses the annuity formula: , where is the loan amount, is the annual interest rate, and is the total number of monthly payments. This formula ensures the loan is fully repaid with interest over the term.
Why does most of my early payment go to interest?
Interest is calculated on the outstanding balance each month. Early in the loan, the balance is highest, so interest charges are largest. As the balance decreases through principal payments, interest shrinks and more of each payment goes to principal. On a 30-year loan at 6.5%, about 86% of the first payment is interest.
How much can I save by making extra payments?
Extra payments go entirely to principal, reducing the balance that future interest is calculated on. For a $300,000 loan at 6.5% over 30 years, adding $200/month extra saves approximately $112,000 in total interest and pays off the loan about 7 years early.
What is PMI and when can I remove it?
Private Mortgage Insurance (PMI) is required when your down payment is less than 20%. It typically costs 0.5% to 1.5% of the loan amount per year. PMI can be removed once you reach 20% equity, meaning your loan-to-value ratio drops to 80% or below.
How does the loan term affect my total cost?
A shorter term like 15 years means higher monthly payments but dramatically less total interest. For a $300,000 loan at 6.5%, a 30-year term costs about $382,000 in total interest, while a 15-year term at a lower rate might cost only $140,000 in interest, saving over $240,000.
Related calculation-mode Variants
Explore more calculation-mode options
More Finance Calculators
Explore the category