Mortgage calculator

Monthly payment on a 400,000 home

At 6.5% over 30 years, a 400,000 home has a first monthly payment of 2,917.11 with 10% down and 2,514.28 with 20% down, including tax, insurance and any PMI. The larger down payment also removes PMI and cuts total interest by 51,017.80.

Each row changes one choice. Property tax is 1.1% of the price a year, insurance 1,500 a year, PMI 0.5% of the loan a year and HOA dues zero. Interest is the total over the life of the loan:

The first monthly total leaves out the extra principal, so the 200 row costs 3,117.11 a month in cash and the 5,000 row 7,917.11.

Paying 200 extra each month clears the loan in 287 months, 23 years 11 months, and saves 108,916.85 of interest.

How the mortgage payment is calculated

Principal and interest follow M = L × r × (1 + r)^n ÷ ((1 + r)^n − 1), where L is the loan, r the monthly rate and n the number of payments. A 300,000 loan at 7.03% for 30 years costs 2,001.96 a month. Property tax, insurance, HOA dues and PMI are added on top.

Mortgage payment worked by hand

Take a 375,000 home bought with 20% down, which leaves a loan of 300,000, at 7.03% for 30 years. That rate was Freddie Mac's average for a 30-year fixed mortgage in the survey published on 24 September 2026 (Primary Mortgage Market Survey).

1. Monthly rate: r = 7.03 ÷ 1,200 = 0.0058583.
2. Number of payments: n = 30 × 12 = 360.
3. Growth factor: (1 + r)^360 = 8.18945.
4. First month's interest: 300,000 × r = 1,757.50.
5. Payment: 1,757.50 × 8.18945 ÷ (8.18945 − 1) = 2,001.96.

Adding 1.1% property tax (375,000 × 0.011 ÷ 12 = 343.75) and 1,500 a year of homeowners insurance (125.00) gives a first monthly payment of 2,470.71. In Excel, =PMT(7.03%/12, 360, -300000) returns the same 2,001.96 for principal and interest.

Keep every digit of r until the end. Rounding it to 0.00586 before raising it to the 360th power makes the payment 2,002.36: 40 cents a month and about 145 over the loan.

How amortization splits each payment

Each month's interest is the balance times r, and the rest of the payment repays principal. Because the balance falls slowly at first, early payments are mostly interest. This excerpt of the schedule is for the 300,000 loan above:

In the first five years you pay 102,602.45 of interest and repay only 17,514.88 of the loan. Principal first exceeds interest in payment 243, and the balance drops below half the loan after payment 262, almost 22 years in.

Total interest is 420,703.98, 1.4 times the amount borrowed. If you expect to sell or refinance within a few years, the balance column, not the payment, shows how much equity you will have.

Property tax, insurance and escrow

Principal, interest, taxes and insurance together are called PITI. A lender that sets up an escrow account collects the tax and insurance with each payment and pays the bills when they fall due.

In the US, Regulation X lets the servicer collect one-twelfth of the expected yearly bills plus a cushion of no more than one-sixth of them (12 CFR 1024.17(c)). With 5,625 a year of tax and insurance, the cushion can reach 937.50.

The escrow payment changes when the tax bill or premium changes (CFPB), so a first-year figure is a starting point, not a fixed cost.

When PMI applies and when it ends

A lender may require private mortgage insurance (PMI) on a conventional loan with less than 20% down (CFPB). With 5% down on the same home, the loan is 356,250, principal and interest are 2,377.32, and PMI at 0.5% a year adds 148.44 a month.

The balance reaches 80% of the price (300,000) after payment 130, when PMI has cost 19,296.88. Under US rules you can then ask in writing to cancel it.

If you never ask, the servicer must end PMI when the balance is scheduled to reach 78%, after payment 142: 12 more months and 1,781.25.

The CFPB defines original value as the lower of the sale price and the appraisal. A low appraisal therefore moves the 80% point later than a price-based schedule shows.

15-year vs 30-year mortgage

In the same Freddie Mac survey the 15-year average was 6.42%, 0.61 points below the 30-year rate. On the 300,000 loan:

The 15-year loan costs 598.19 more a month and 252,677.62 less in interest. Most of that saving comes from the shorter term: at 7.03% over 15 years, interest would be 186,273.42, so the lower rate saves a further 18,247.06.

The 30-year loan's lower required payment leaves slack if income falls, and extra payments on it recover part of the gap, as shown below.

How the interest rate changes your payment

For a 300,000 loan:

On the 30-year loan each half point adds 93 to 104 a month and 33,400 to 37,300 of interest over the term. Payments scale with the loan, so for 450,000 multiply any row by 1.5.

The payment comes from the note rate. The APR also spreads points and fees over the loan, so it is usually higher than the rate (CFPB). Compare offers on both: the rate for the payment, the APR for the cost of fees.

Extra payments and biweekly plans

Extra principal lowers the balance that every later month's interest is charged on. On the 300,000 loan at 7.03%:

The 166.83 row is one-twelfth of the monthly payment, which adds up to one extra payment a year. A biweekly plan, paying half the payment every two weeks, makes 26 half-payments a year and has close to the same effect.

Check the loan note for a prepayment penalty before paying extra.

Mistakes that skew the result

• Treating the first payment as permanent. The total falls by the PMI amount once PMI ends, and escrow is reset whenever tax or insurance bills change.
• Ignoring rate resets. The payment formula assumes one fixed rate. For an adjustable-rate loan, work out the fixed period, then again at a plausible reset rate.
• Entering a Canadian rate as quoted. Canadian fixed rates compound half-yearly, so they need converting first, as the next section shows.

Canadian mortgages and other currencies

Canada's Interest Act requires a blended-payment mortgage to state its rate "calculated yearly or half-yearly, not in advance" (section 6). Convert it to monthly compounding with 12 × ((1 + rate ÷ 2)^(1/6) − 1): 5.00% becomes 4.9487%.

On 300,000 over 25 years, that is 1,744.81 a month, not the 1,753.77 that 5% compounded monthly gives.

Canadian mortgage loan insurance is typically required with less than 20% down (FCAC). It is a one-time premium, a percentage of the mortgage, paid as a lump sum or added to the loan (CMHC), so treat it as part of the loan, not as monthly PMI.

The Canadian mortgage calculator handles half-yearly compounding and the premium directly. Elsewhere the annuity formula is the same in any currency; for a home loan in India or the UK, the loan EMI calculator adds tenure in months and one-off prepayments.

To work back from the payment you can afford to a price, use the loan affordability calculator. To weigh buying against renting, use the rent vs buy calculator, and for a loan you already hold, the refinance calculator.