Mortgage Calculator
Estimate monthly payments and interest for your home loan.
How Mortgage Payments Work
A mortgage payment typically consists of four main components (PITI): Principal, Interest, Taxes, and Insurance. This calculator focuses on the Principal and Interest (P&I) portion.
Understanding Amortization
In the early years of a mortgage, the majority of your payment goes toward interest. As the loan balance decreases over time, a larger portion of the payment goes toward the principal. This process is called amortization.
Key Factors Affecting Your Payment
- Down Payment: Putting at least 20% down avoids Private Mortgage Insurance (PMI) and lowers your monthly payment.
- Loan Term: A 30-year term has lower monthly payments but costs much more in interest than a 15-year term.
- Interest Rate: Even a 0.5% difference in rate can save or cost you tens of thousands of dollars over the life of the loan.
Fixed vs. Adjustable Rate
A Fixed-Rate Mortgage locks in your interest rate for the entire loan term, providing stability. An Adjustable-Rate Mortgage (ARM) may start with a lower rate that fluctuates after an initial period, which carries more risk if rates rise.
How to Lower Your Mortgage Costs
Making extra payments toward your principal reduces your loan balance faster and saves significant interest. See our Mortgage Payoff Calculator to see how much you can save.