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Mortgage Calculator — Free & Accurate Monthly Payment Calculator

Reviewed by FinRatePro Editorial TeamLast reviewed: June 2026

A mortgage is the largest financial commitment most people will ever make. Over a 30-year loan term on a $400,000 home, a borrower with a 6.5% interest rate will pay more than $510,000 in interest alone — more than the original loan amount. Understanding exactly how your monthly payment is calculated, what portion goes to principal versus interest, and how different inputs (down payment, interest rate, loan term) affect your total cost is essential for making an informed homebuying decision.

Our mortgage calculator provides an accurate, transparent breakdown of your monthly payment, total interest, and complete amortization schedule, with no hidden assumptions or opaque calculations. Unlike many mortgage calculators that silently assume a 20% down payment and exclude taxes and insurance, our calculator makes every assumption visible and adjustable.

Mortgage Calculator Inputs
$
$
$
PMI Active

Because your down payment is below 20%, Private Mortgage Insurance (PMI) is required. Estimated at 0.5% of loan amount annually = $168.75/month.

Your Monthly Payment
Total Monthly Payment
$3,644.32
Principal & Interest$2,626.82
Property Tax$686.25
Homeowners Insurance$162.50
PMI$168.75
Loan Amount$405,000
Down Payment$45,000
Total Interest Paid$540,656

How to Use This Calculator

Using the mortgage calculator is straightforward, but understanding each input field helps you get the most accurate result. Here is a breakdown of each input:

  • Home Price — Enter the total purchase price of the home you are considering. This is the full price, not the loan amount. The calculator will subtract your down payment to determine the loan principal.
  • Down Payment — Enter the amount of cash you will pay upfront as a percentage of the home price. A down payment of 20% or more eliminates the need for PMI (private mortgage insurance), which can save you $100-$300 per month.
  • Interest Rate — Enter the annual interest rate quoted by your lender. As of June 2025, the average 30-year fixed mortgage rate in the United States is approximately 6.75%, but rates vary by lender, loan type, and your credit score.
  • Loan Term — Select the length of your mortgage. The most common terms are 30 years (360 months) and 15 years (180 months). A shorter term means higher monthly payments but significantly less total interest paid over the life of the loan.
  • Property Taxes — Enter the annual property tax rate for the property. The average US property tax rate is approximately 1.1% of home value, but rates vary widely by location (from 0.28% in Hawaii to 2.49% in New Jersey).
  • Homeowners Insurance — Enter the annual premium for homeowners insurance. The average US premium is approximately $1,400 per year, but costs vary by location, home value, and coverage level.
  • HOA Fees — If the property is in a homeowners association, enter the monthly HOA fee. This is added directly to your monthly payment.

Formula & Methodology

The core mortgage payment formula calculates the fixed monthly payment required to fully amortize a loan (pay it off completely) over a specified term at a specified interest rate. The formula is:

M = P × [r(1+r)n] / [(1+r)n - 1]

Where: M = monthly payment; P = loan principal (home price minus down payment); r = monthly interest rate (annual rate divided by 12); n = total number of payments (loan term in years multiplied by 12).

This formula is derived from the present value of an annuity formula and is the standard amortization formula used by virtually every mortgage lender in the United States. It assumes a fixed interest rate and equal monthly payments over the life of the loan. For adjustable-rate mortgages (ARMs), the payment recalculates when the rate adjusts, so this calculator provides only the initial payment for ARMs.

The total interest paid over the life of the loan is calculated as: Total Interest = (M × n) - P. This represents the difference between the total amount paid over the loan term and the original principal.

The PMI estimate of 0.5% annually is a reasonable average, but actual PMI rates vary based on the loan-to-value ratio, credit score, and loan type. PMI is automatically canceled when the loan-to-value ratio reaches 78% under federal law (the Homeowners Protection Act of 1998), though borrowers can request cancellation at 80% LTV.

Worked Example

Let us walk through a real calculation using current market data. Consider a homebuyer purchasing a $450,000 home in Austin, Texas with a 30-year fixed-rate mortgage at 6.75% interest. The buyer is making a 10% down payment ($45,000), which means the loan principal is $405,000.

Step-by-Step Calculation
Step 1: Monthly P&I Payment

P = $405,000, r = 0.0675/12 = 0.005625, n = 360. Using the formula: M = $405,000 × [0.005625 × (1.005625)360] / [(1.005625)360 - 1] = $2,629.46/month

Step 2: Property Taxes

Austin average rate = 1.83%. Annual = $450,000 × 0.0183 = $8,235. Monthly = $8,235 / 12 = $686.25/month

Step 3: Homeowners Insurance

Texas average premium = $1,950/year (higher due to hurricane risk). Monthly = $162.50/month

Step 4: PMI

At 10% down, PMI ≈ 0.5% of loan annually = $2,025/year. Monthly = $168.75/month

Step 5: Total Monthly Payment

$2,629.46 + $686.25 + $162.50 + $168.75 = $3,646.96/month

Over the 30-year loan term, the buyer will pay $946,606 in total (360 × $2,629.46), of which $541,606 is interest. This illustrates why understanding the full cost of a mortgage, not just the monthly payment, is critical for financial planning.

Common Use Cases

Homebuyers use this calculator in several common scenarios. First, buyers in the early stages of house hunting use it to determine how much house they can afford. A common rule of thumb is that total housing costs should not exceed 28% of gross monthly income.

Second, buyers comparing loan offers from multiple lenders use the calculator to see how different interest rates affect the monthly payment and total interest. A difference of just 0.25% on a $400,000 loan amounts to approximately $67 per month and $24,000 over the life of the loan.

Third, existing homeowners evaluating a refinance use the calculator to compare their current payment to what they would pay at current rates. Fourth, buyers considering different loan terms (15-year vs 30-year) use the calculator to quantify the tradeoff between monthly payment and total interest paid.

Frequently Asked Questions

What is the difference between APR and interest rate?
The interest rate is the cost of borrowing the principal, expressed as a percentage. The APR (annual percentage rate) includes the interest rate plus other costs such as lender fees, discount points, and mortgage insurance, expressed as an annual rate. APR is typically 0.25% to 0.50% higher than the interest rate and is a more accurate measure of the true cost of the loan. For the most accurate calculation, use the APR in the interest rate field.
How does my credit score affect my mortgage rate?
Mortgage rates are heavily dependent on credit score. As of 2025, borrowers with credit scores above 760 typically qualify for the lowest rates (approximately 6.5% on a 30-year fixed), while borrowers with scores in the 620-639 range may pay 7.75% or higher — a difference of 1.25%, which translates to approximately $330 per month on a $400,000 loan and $119,000 over the loan term. Improving your credit score before applying for a mortgage is one of the highest-return financial actions you can take.
Should I pay discount points to lower my rate?
Discount points are upfront fees paid to the lender in exchange for a lower interest rate. One point typically costs 1% of the loan amount and lowers the rate by 0.25%. Whether points are worth paying depends on how long you plan to stay in the home. The break-even point is typically 5-7 years: if you expect to sell or refinance before then, paying points is not worthwhile; if you plan to stay longer, points can save tens of thousands of dollars.
What is PMI and how can I avoid it?
Private mortgage insurance (PMI) is required on conventional loans when the down payment is less than 20% of the home value. PMI protects the lender (not the borrower) if the borrower defaults. The typical cost is 0.5% to 1.0% of the loan amount annually, added to the monthly payment. PMI is automatically canceled when the loan-to-value ratio reaches 78%, or borrowers can request cancellation at 80% LTV if the home has appreciated. PMI can be avoided entirely by making a 20% down payment, or by using a piggyback loan (an 80-10-10 structure).
How accurate are this calculator's results?
The calculator uses the standard mortgage amortization formula and produces results accurate to within a few dollars of the actual payment quoted by lenders. However, the calculator cannot account for lender-specific fees, escrow analysis adjustments, or rate lock conditions. For an exact payment, request a Loan Estimate from your lender, which is a standardized 3-page document that itemizes all costs. The calculator is designed for planning purposes and should be supplemented with a Loan Estimate before making a final decision.
Does this calculator work for FHA, VA, or USDA loans?
The core amortization formula works for any fixed-rate mortgage. However, FHA loans require upfront and annual mortgage insurance premiums (MIP) that differ from conventional PMI; VA loans require a funding fee instead of PMI; and USDA loans require guarantee fees. For these loan types, use the calculator to estimate the principal and interest payment, then add the appropriate government insurance premium manually. We are developing dedicated calculators for each government loan type.

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References

  1. Consumer Financial Protection Bureau. "What is a mortgage?" consumerfinance.gov.
  2. Federal Reserve. "Mortgage Rates" (H.15 release). federalreserve.gov.
  3. National Association of Realtors. "2024 Home Buyer and Seller Generational Trends."
  4. U.S. Census Bureau. "Quarterly Residential Vacancies and Homeownership."
  5. Homeowners Protection Act of 1998, 12 U.S.C. 4901 et seq.

Disclaimer: This calculator and the accompanying content are for educational purposes only and do not constitute financial advice. Mortgage terms, rates, and requirements vary by lender and are subject to change. Consult a licensed mortgage professional before making any mortgage decision.