Mortgage Calculator - Payment, PMI & Schedule

Buying a home is the single largest financial commitment most people will ever make, and understanding what you can actually afford starts with one number: your monthly mortgage payment.

Reviewed by: CalcMojo Editorial Team

This mortgage calculator breaks that number down for you in seconds. Enter your loan amount, interest rate, and loan term, and the tool returns your estimated monthly payment along with a full amortization schedule showing how each payment splits between principal and interest over the life of the loan.

Beyond the basic payment, the calculator factors in property taxes, homeowners insurance, and private mortgage insurance (PMI) so you see the true monthly cost of owning a home rather than just the principal-and-interest figure your lender quotes. You can also see the total interest paid over the full term of the loan, which is often a shock to first-time buyers. On a 30-year conventional mortgage, total interest frequently exceeds half the original loan amount.

Whether you are a first-time buyer comparing neighborhoods, a current homeowner considering a refinance, or an investor running numbers on a rental property, this tool gives you the clarity to make decisions grounded in actual math rather than rough estimates. Adjust any variable, see the impact instantly, and walk into your lender meeting prepared.

How Mortgage Payments Are Calculated

Every fixed-rate mortgage in the United States uses the same underlying math. Your monthly payment is determined by the standard amortization formula used by US mortgage lenders, commonly referred to as the PMT (Payment) formula:

M = P[r(1+r)^n] / [(1+r)^n – 1]

Where:

M = monthly mortgage payment
P = principal loan amount (the total amount borrowed)
r = monthly interest rate (annual rate divided by 12)
n = total number of monthly payments (loan term in years multiplied by 12)

This formula calculates a level payment that, when applied every month for the full term, pays off the entire principal balance plus all accrued interest by the final payment. The payment amount itself stays the same each month, but the allocation between principal and interest shifts over time. In the early years, the majority of each payment goes toward interest. As the remaining balance shrinks, an increasing share goes toward principal. This gradual shift is called amortization.

For example, on a $350,000 loan at 6.5% interest over 30 years, the monthly principal-and-interest payment works out to approximately $2,212. In the first month, roughly $1,896 of that goes to interest and only $316 goes to principal. By month 300, the split is nearly reversed. The amortization schedule produced by this calculator shows you that breakdown for every single month.

It is worth noting that this formula applies to fixed-rate mortgages. Adjustable-rate mortgages (ARMs) use the same formula for each adjustment period but recalculate the payment when the rate changes. If you are evaluating an ARM, use the initial rate for your starting payment estimate, but plan for potential increases.

What Affects Your Monthly Mortgage Payment

Your monthly housing cost is driven by several factors, some within your control and some determined by the market or your location.

Principal (Loan Amount). This is the amount you borrow, which equals the purchase price minus your down payment. A larger down payment reduces the principal and therefore the monthly payment. On a $400,000 home, putting 20% down ($80,000) means borrowing $320,000 instead of $380,000 with 5% down. That difference alone can reduce your monthly payment by several hundred dollars. Use our Loan Calculator for additional scenarios.

Interest Rate. Even small differences in rate have a large effect over a 30-year term. On a $300,000 loan, the difference between 6.0% and 6.5% adds approximately $100 per month and more than $35,000 in total interest over the life of the loan. Rates are determined by a combination of Federal Reserve policy, bond market conditions, your credit profile, and the specific loan product.

Loan Term. The most common terms are 30 years and 15 years, though 10-year and 20-year options exist. A shorter term means higher monthly payments but dramatically less total interest. The next section covers this tradeoff in detail.

Property Taxes. Local governments assess property taxes based on the assessed value of your home, and these are typically collected monthly through your mortgage servicer’s escrow account. Rates vary widely by state and municipality, ranging from under 0.3% to over 2% of the home’s assessed value annually. This calculator lets you enter your estimated annual property tax so the monthly figure is included in your total payment.

Homeowners Insurance. Your lender requires you to carry homeowners insurance, and like property taxes, the premium is usually escrowed and paid monthly as part of your mortgage payment. Average annual premiums range from $1,000 to $3,000 or more depending on the home’s location, size, age, and local risk factors such as flood or wildfire exposure.

Private Mortgage Insurance (PMI). If your down payment is less than 20% of the purchase price on a conventional loan, your lender will require PMI. This insurance protects the lender (not you) in case of default. PMI typically costs between 0.5% and 1.5% of the original loan amount per year, added to your monthly payment. We cover PMI in more depth below.

Understanding all six components is essential to knowing what you can truly afford. The principal-and-interest payment your lender advertises is only part of the picture. The full PITI payment (Principal, Interest, Taxes, and Insurance) plus PMI where applicable is what actually comes out of your bank account each month.

30-Year vs 15-Year Mortgage: Which Is Better?

This is one of the most common questions homebuyers face, and the answer depends on your financial priorities and cash flow.

The 30-Year Fixed Mortgage

The 30-year term is the most popular choice in the United States for good reason. It offers the lowest monthly payment of any standard fixed-rate option, which maximizes your purchasing power and leaves more room in your monthly budget for other goals.

Pros:

Lower monthly payments, improving cash flow
More home buying power for the same monthly budget
Extra cash can be invested elsewhere, potentially earning a higher return than the mortgage rate
Greater financial flexibility if income drops or expenses spike

Cons:

Significantly more total interest paid over the life of the loan
Slower equity building in the early years
Typically carries a slightly higher interest rate than a 15-year loan

The 15-Year Fixed Mortgage

A 15-year term cuts the repayment period in half and usually comes with a lower interest rate, typically 0.5% to 0.75% below the 30-year rate. The combination of a shorter term and lower rate means dramatically less total interest.

Pros:

Much less total interest paid (often less than half the total interest of a 30-year loan)
Faster equity building
Lower interest rate
Debt-free homeownership in half the time

Cons:

Higher monthly payments (typically 40% to 50% more than a 30-year payment on the same loan)
Reduced financial flexibility
May limit the purchase price you can qualify for

A Concrete Comparison

On a $350,000 loan at 6.5% (30-year) versus 5.9% (15-year):

30-year monthly payment: approximately $2,212. Total interest: approximately $446,247.
15-year monthly payment: approximately $2,943. Total interest: approximately $179,723.

The 15-year option costs $731 more per month but saves over $266,000 in total interest. Whether that tradeoff works for you depends on whether you can comfortably absorb the higher payment without sacrificing retirement contributions, emergency savings, or quality of life.

A practical middle ground: take the 30-year loan for flexibility but make extra payments when cash flow allows. This approach gives you the safety net of a lower required payment while still accelerating payoff when you can afford to. Use the Amortization Calculator to model the impact of extra payments on your specific loan.

How to Pay Off Your Mortgage Early

Paying off your mortgage ahead of schedule can save tens or even hundreds of thousands of dollars in interest. Here are the most effective strategies.

Make Extra Principal Payments. Any additional amount you pay beyond your required monthly payment goes directly to reducing principal. Even an extra $100 or $200 per month can shave years off a 30-year loan. On a $300,000 loan at 6.5%, adding $200 per month to your payment reduces the total term by roughly 6 years and saves over $90,000 in interest. When making extra payments, confirm with your servicer that the extra amount is applied to principal, not advanced toward future payments.

Switch to Biweekly Payments. Instead of making 12 monthly payments per year, you make a half-payment every two weeks. Because there are 52 weeks in a year, this results in 26 half-payments, or the equivalent of 13 full monthly payments. That one extra payment per year, applied to principal, can cut roughly 4 to 5 years off a 30-year mortgage.

Make One Extra Payment Per Year. If biweekly scheduling is inconvenient, simply make one additional full payment each year, perhaps from a tax refund or annual bonus. The effect is similar to the biweekly approach.

Refinance to a Shorter Term. If interest rates have dropped since you took out your loan, refinancing to a shorter term at a lower rate can dramatically accelerate payoff. Be sure to factor in closing costs, which typically run 2% to 5% of the loan amount. The break-even point, the time it takes for monthly savings to recoup closing costs, is the key metric. If you plan to stay in the home past that break-even point, the refinance likely makes sense.

Round Up Your Payments. If your required payment is $1,847, round up to $1,900 or $2,000. The difference goes to principal and requires minimal budgeting effort. Over 30 years, even modest rounding can eliminate a year or more from the term.

Before aggressively paying down your mortgage, consider whether higher-interest debt (credit cards, personal loans) should be addressed first. Also ensure your retirement accounts and emergency fund are adequately funded. A mortgage is typically the lowest-cost debt most households carry, so paying it off early at the expense of other financial priorities may not always be optimal. Explore the tradeoffs using our Compound Interest Calculator to compare investment returns against mortgage interest savings.

What Is PMI and When Do You Need It?

Private mortgage insurance (PMI) is required on conventional mortgage loans when the borrower’s down payment is less than 20% of the home’s purchase price. PMI protects the lender against the increased risk of default that comes with a smaller equity cushion. It does not protect the borrower.

How Much Does PMI Cost?

PMI rates depend on your credit score, down payment percentage, and loan amount. Typical annual premiums range from 0.5% to 1.5% of the original loan amount. On a $300,000 loan, that translates to $1,500 to $4,500 per year, or $125 to $375 added to your monthly payment.

When Does PMI Apply?

PMI applies to conventional loans with less than 20% down. Government-backed loans handle mortgage insurance differently. FHA loans charge both an upfront mortgage insurance premium (1.75% of the loan) and an annual premium (0.55% for most borrowers) that lasts for the life of the loan if your down payment is under 10%. VA loans charge a funding fee but do not require monthly mortgage insurance. USDA loans have both an upfront guarantee fee and an annual fee.

How to Remove PMI

Under the Homeowners Protection Act of 1998, your lender must automatically cancel PMI when your loan balance reaches 78% of the original purchase price, assuming you are current on payments. You can also request cancellation when the balance reaches 80% of the original value. Some lenders allow cancellation based on a new appraisal showing your home has appreciated enough for equity to exceed 20%, even if you have not yet paid the balance down to 80%.

Getting rid of PMI should be a priority once you reach the equity threshold. That $200 or $300 per month going to PMI could instead go toward extra principal payments, retirement savings, or other financial goals.

For FHA loans, the only way to eliminate the annual mortgage insurance premium (for loans originated after June 2013 with less than 10% down) is to refinance into a conventional loan once you have at least 20% equity.

How to Get the Best Mortgage Rate

Your mortgage rate determines how much you pay in interest over the life of the loan, so even a small improvement can save substantial money. Here are the most impactful steps.

Improve Your Credit Score. Your credit score is the single biggest factor in the rate you are offered. Borrowers with scores above 760 typically receive the best available rates, while scores below 680 may add 0.5% to 1.5% or more to the rate. Before applying for a mortgage, check your credit reports for errors, pay down credit card balances to reduce your utilization ratio, avoid opening new credit accounts, and make all payments on time. Even a 20-point improvement can move you into a better rate tier.

Make a Larger Down Payment. A larger down payment reduces the lender’s risk and often results in a lower rate. The most significant threshold is 20%, which eliminates PMI and signals strong borrower creditworthiness. If 20% is not feasible, even incremental increases above the minimum (say, 10% instead of 5%) can improve your rate.

Shop Multiple Lenders. Rate quotes vary between lenders, sometimes significantly. Get quotes from at least three to five lenders, including banks, credit unions, and online lenders. Compare not just the interest rate but also the annual percentage rate (APR), which includes fees and gives a truer picture of the total borrowing cost. A lower rate with higher fees can end up costing more than a slightly higher rate with lower fees.

Consider Buying Points. Mortgage points (also called discount points) let you prepay interest at closing in exchange for a lower rate. One point costs 1% of the loan amount and typically reduces the rate by 0.25%. On a $300,000 loan, one point costs $3,000 but saves roughly $50 per month. The break-even on that investment is about 5 years. If you plan to stay in the home longer, points can be a smart move.

Lock Your Rate at the Right Time. Mortgage rates fluctuate daily. Once you have a rate you are comfortable with, lock it in. Most rate locks last 30 to 60 days. If you are still shopping, monitor rate trends and be prepared to lock quickly if rates move favorably.

Choose the Right Loan Type. Fixed-rate loans offer predictability, while ARMs may offer lower initial rates. Government-backed loans (FHA, VA, USDA) often carry lower rates than conventional loans but come with their own insurance costs and requirements. Your ideal loan type depends on your down payment, credit score, military status, property location, and how long you plan to stay in the home.

Lenders will also evaluate your debt-to-income ratio (DTI) when determining your rate and loan approval. Most conventional lenders prefer a DTI below 43%, with lower ratios improving your chances of the best rates. Use the Debt-to-Income Calculator to check where you stand before applying.

This calculator provides estimates for informational purposes only. It is not financial advice. Results may not reflect your actual loan terms, tax situation, or investment returns. Consult a licensed financial advisor, CPA, or mortgage professional before making financial decisions.

Frequently Asked Questions

What is a good mortgage rate right now?

Mortgage rates change daily and depend on economic conditions, Federal Reserve policy, and your personal financial profile. As a general benchmark, a "good" rate is one that falls at or below the current national average for your loan type and term. Borrowers with excellent credit (760+), a 20% down payment, and low debt-to-income ratios typically qualify for the most competitive rates. Check multiple lenders and compare APRs rather than advertised rates alone, since fees can significantly affect the true cost of the loan.

How much house can I afford?

A common guideline is the 28/36 rule: your monthly housing costs (mortgage, taxes, insurance, PMI) should not exceed 28% of your gross monthly income, and your total debt payments should not exceed 36%. For example, if your household gross income is $8,000 per month, aim for a total housing payment no higher than $2,240. However, lender maximums (often allowing DTI up to 43% or higher for certain programs) do not necessarily mean you should borrow that much. Factor in your lifestyle, savings goals, and job stability when deciding.

What is PMI and how do I avoid it?

Private mortgage insurance (PMI) is an additional monthly cost lenders require when your down payment on a conventional loan is less than 20%. It protects the lender, not you, against default. To avoid PMI entirely, put at least 20% down. If that is not possible, PMI can be removed once your equity reaches 20% through payments or home appreciation. Alternatively, some lenders offer "lender-paid PMI" options where the cost is built into a slightly higher interest rate.

Is a 30-year or 15-year mortgage better?

Neither is universally better. A 30-year mortgage offers lower monthly payments and greater flexibility. A 15-year mortgage costs more per month but saves a substantial amount in total interest and builds equity faster. If your budget comfortably supports the higher 15-year payment without sacrificing retirement savings or emergency reserves, it is the more cost-efficient choice. If cash flow flexibility is important, the 30-year term with optional extra payments offers a balanced approach.

How do I calculate my mortgage payment manually?

Use the standard amortization formula: M = P[r(1+r)^n] / [(1+r)^n – 1]. Convert the annual interest rate to a monthly rate by dividing by 12 (e.g., 6% annual becomes 0.005 monthly). Multiply the loan term in years by 12 to get the total number of payments. Plug the principal (P), monthly rate (r), and number of payments (n) into the formula. For a $250,000 loan at 6% for 30 years: r = 0.005, n = 360, and the monthly payment works out to approximately $1,499.

What credit score do I need for the best mortgage rate?

Most lenders reserve their best rates for borrowers with FICO scores of 760 or above. Scores between 700 and 759 still qualify for competitive rates but may pay a modest premium. Below 680, expect noticeably higher rates. FHA loans are available to borrowers with scores as low as 580 (with 3.5% down) or even 500 (with 10% down), but the rates and insurance costs will be higher. Improving your score before applying is one of the highest-return financial moves you can make.

How much should I put down on a house?

The traditional recommendation is 20% to avoid PMI and secure the best rates, but many loan programs allow much less. Conventional loans go as low as 3% down, FHA loans require 3.5%, VA and USDA loans offer zero-down options for eligible borrowers. The right down payment depends on your savings, the local housing market, and your tolerance for higher monthly costs. Putting less than 20% down is not inherently bad, but you should understand the PMI costs and potentially higher rates that come with it.

What is included in my monthly mortgage payment?

Most monthly mortgage payments include four components, often abbreviated as PITI: Principal (the portion reducing your loan balance), Interest (the cost of borrowing), Taxes (property taxes collected in escrow), and Insurance (homeowners insurance collected in escrow). If your down payment is below 20%, PMI is a fifth component. Some borrowers also escrow for HOA fees or flood insurance. The principal-and-interest portion is fixed on a fixed-rate loan, but taxes and insurance can change annually.

Sources & Methodology

Mortgage payments calculated using the standard amortization formula (PMT), the same formula used by US mortgage lenders and financial institutions to determine fixed-rate loan payments.
PMI cost ranges based on published industry data from the Urban Institute and mortgage insurance providers (MGIC, Radian, Essent).
Credit score tier impacts on mortgage rates derived from Freddie Mac and FICO published rate adjustment matrices.
The 28/36 qualifying rule is a widely used underwriting guideline referenced by the Consumer Financial Protection Bureau (CFPB).
PMI cancellation rules governed by the Homeowners Protection Act of 1998 (HPA), 12 U.S.C. 4901-4910.
Property tax ranges based on data from the Tax Foundation and U.S. Census Bureau annual surveys.

Default rates shown are illustrative. Always verify current rates with your lender/provider. Data accurate as of: March 2026