How to use the Mortgage Calculator
- Enter the purchase price and the cash down payment to determine the financed principal.
- Add the repayment term, annual interest rate, yearly property tax, and yearly home insurance.
- Compare the principal-and-interest payment with the all-in monthly estimate and review total interest over the full term.
How the calculation works
M = P × [r(1 + r)ⁿ] ÷ [(1 + r)ⁿ − 1]M is the monthly principal-and-interest payment, P is the loan amount after the down payment, r is the monthly interest rate, and n is the number of monthly payments. Annual tax and insurance are divided by 12 and added separately.
Example calculation
For a $350,000 home with $70,000 down, the loan principal is $280,000. At 6.5% for 30 years, principal and interest are about $1,769. Add $350 monthly property tax and $125 insurance for an estimated total near $2,244 per month.
How to interpret the result
The all-in monthly figure is useful for an initial affordability check. Total interest shows the long-term cost of borrowing if the rate and payment schedule remain unchanged and the loan is held to maturity.
Notes and assumptions
- The loan has a fixed interest rate and equal monthly payments.
- Payments occur at the end of each month with no extra principal payments.
- HOA dues, mortgage insurance, lender fees, maintenance, tax changes, and insurance changes are not included.
- Results are estimates, not a lender quote or financial advice.
Mortgage Calculator questions
What is included in the monthly mortgage estimate?
The estimate includes principal, interest, entered property tax, and entered home insurance. It excludes fees and costs not shown in the form.
How does a larger down payment change the result?
A larger down payment reduces the principal, usually lowering monthly principal and interest as well as total interest.
Does the calculator include private mortgage insurance?
No. Add any required mortgage insurance or similar lender charge separately.