Mortgage Calculator

This mortgage calculator estimates the monthly payment on a home loan, plus the taxes, insurance, and other costs of owning the property. Enter a home price, down payment, loan term, and interest rate, then add optional property tax, insurance, HOA dues, and extra payments to see the full picture. The tool also builds a year-by-year amortization schedule so you can watch the balance fall. It assumes a U.S. fixed-rate loan and U.S. cost conventions.

What a mortgage is

A mortgage is a loan used to buy property, with the property itself pledged as collateral. The lender pays the seller, and you repay the lender over a set number of years, usually 15 or 30 in the United States. Each monthly payment splits into two parts. Principal is the slice that reduces what you owe. Interest is what the lender charges for the loan. Many loans also collect property tax and homeowners insurance through an escrow account and pass that money on for you. You hold legal title while you pay, but the lender keeps a claim on the home until the final payment clears. The conventional 30-year fixed loan is the most common option in the U.S., accounting for roughly 70% to 90% of mortgages, and it is how most American households buy a home.

The four inputs, and what each one means

Four numbers drive the result. Get them right and the estimate lands close to a real quote.

• Loan amount is the purchase price minus your down payment, and it sets the size of the debt. How much you can borrow usually tracks your household income. Our House Affordability Calculator can help you find a realistic figure.
• Down payment is the cash you pay up front, quoted as a percent of the price. Lenders like to see 20% or more. Some programs accept as little as 3%, but a down payment under 20% almost always adds private mortgage insurance until you have paid the balance down to about 80% of the original price. A bigger down payment tends to win a lower rate and an easier approval.
• Loan term is how long you have to repay. Fixed-rate loans usually run 15, 20, or 30 years. Shorter terms carry lower rates but higher monthly payments.
• Interest rate is the yearly cost of borrowing, shown as an annual percentage rate (APR). This calculator prices fixed-rate loans, where the rate stays put for the whole term. An adjustable-rate mortgage starts with a fixed stretch and then resets against a market index, which shifts some risk onto you; its opening rate often sits 0.5% to 2% below a comparable fixed loan. A 6% APR works out to 0.5% charged each month.

The recurring costs of ownership

Your loan payment is only part of the monthly cost. Property taxes, insurance, HOA dues, and upkeep tend to climb over the years as prices rise, so the calculator lets you include them and set an annual increase for each.

• Property tax is charged by local government on the value of your home. All 50 states tax property at the county or city level, and the yearly bill averages around 1.1% of the home's value, though it swings widely by area.
• Home insurance covers damage to the house and often adds liability protection if someone is hurt on your property. The premium depends on location, the condition of the home, and how much coverage you buy.
• Private mortgage insurance protects the lender when your down payment is under 20%. You pay it until the loan-to-value ratio reaches 78% to 80%, and it usually runs 0.3% to 1.9% of the loan amount per year.
• HOA fees go to a homeowners association that maintains shared areas in condos, townhomes, and some subdivisions. Annual dues typically come to under 1% of the home's value.
• Upkeep covers utilities, repairs, and general maintenance. Budgeting 1% or more of the home's value each year for maintenance is a common guideline.

One-time costs the calculator leaves out

A few large costs land once and sit outside this calculator, but they belong in your budget. Closing costs are the fees due when the sale finalizes, covering items like title service, recording, appraisal, inspection, transfer tax, lender fees, points, and prepaid taxes and insurance. On a $400,000 purchase, a buyer often pays somewhere near $10,000, though you can sometimes negotiate a credit from the seller or the lender. Renovations before move-in are optional; new flooring, paint, or a kitchen update can run up fast, and you can defer most of it. Moving, new furniture, and appliances round out the early spending, along with any immediate repairs.

Paying the loan off early

Many borrowers want to clear a mortgage ahead of schedule to save on interest, get ready to sell, or refinance. This calculator accepts extra monthly, yearly, and one-time payments so you can test the effect. Three approaches show up most often, and you can mix them.

• Extra payments add money on top of the required amount. Because early payments are mostly interest, every extra dollar cuts the balance and trims future interest, which shortens the loan. Some people pay a fixed extra each month; others add money when they have it.
• Biweekly payments split the monthly amount in half and pay it every two weeks. Across 52 weeks that comes to 26 half-payments, or 13 full months of payments in a year. It suits anyone paid every two weeks, and the calculator can show biweekly results for comparison.
• Refinancing to a shorter term replaces the old loan with a new one, often at a lower rate, which speeds up payoff. The monthly payment usually rises, and you pay closing costs again.

Paying ahead has real upsides: less interest over the life of the loan, a shorter payoff, and the plain relief of owning the home free and clear. There are trade-offs too. Some contracts carry a prepayment penalty, often a percent of the balance or a few months of interest, that usually fades within about five years; a payoff from selling the home is normally exempt. Cash sent to the mortgage cannot be invested elsewhere, and if your rate is low, that money might earn more in the market. Money tied up in the house is also hard to reach if you suddenly need it. And because U.S. filers who itemize can deduct mortgage interest, paying less interest can mean a smaller deduction.

Reading the amortization schedule

Amortization is the schedule that pays a loan down to zero through equal monthly payments. At the start, most of each payment is interest because the balance is large, so equity builds slowly. As the balance drops, the interest share shrinks and more of each payment goes to principal, which speeds up in the later years. The table on this page lists the split for every year of the loan and the remaining balance, so you can see when you cross the halfway point on principal, or how a few extra payments move the payoff date forward.

A short history of U.S. mortgages

Home loans looked very different a century ago. Buyers often put 50% down, borrowed for three to five years, and owed a large balloon payment at the end. Only about four in ten Americans could manage it, and a quarter of homeowners lost their homes during the Great Depression. In the 1930s the federal government set up the Federal Housing Administration (FHA) and Fannie Mae to make loans steadier and easier to get. They helped bring the 30-year mortgage, smaller down payments, and shared construction standards into the market, and they financed homes for soldiers returning from World War II. The homeownership rate hit a record 68.1% in 2001. During the 2008 crisis, the government took Fannie Mae into conservatorship after heavy losses; it was profitable again by 2012, and federal backing helped the housing market steady by 2013. Both agencies still insure millions of U.S. homes today.

Put this calculator on your own site

If you run a property, broker or personal finance site, there is a free embeddable version of this calculator you can paste into a page. Choose the colour, theme and fields you want, copy one snippet, and it runs in your visitor's browser with nothing sent back to us. The mortgage calculator widget page has the code and the install steps for WordPress, Wix, Squarespace and plain HTML.