Comprehensive Guide
Learn more in our Loans & Mortgage Guide.
How it works
A mortgage is a 30-year (or 15-year) amortizing loan: each monthly payment splits into interest for the bank and principal reducing your balance. The engine starts from your home price and down payment, derives the loan amount, and runs a month-by-month simulation. Two things most people underestimate. First, the all-in monthly cost: PMI when the loan starts above 80% of value (charged until it crosses 80%), property tax, insurance and HOA on top of principal and interest. Second, the total interest: on a $360,000 loan at 6.5%, the payment may be $2,275 but the loan costs nearly $460,000 of interest over 30 years — more than the loan itself. The extra-payment slider attacks that: an extra $200 a month on the same loan clears it years early and saves over $100,000 of interest, all because extra payments are pure principal, permanently deleting the interest they would have generated. Every field in this calculator exists for a reason. Enter Home price, Down payment, Interest rate, Loan term, Annual property tax, and the engine recomputes the results instantly — no signup, no email, and nothing is sent to a server, because the math runs entirely in your browser. Change one input at a time to see which lever moves the result most; that sensitivity, not any single number, is usually the real insight. The worked example below the form uses realistic defaults so you can sanity-check the output before trusting it with your own figures, and the formula is published on the page so you can verify every step of the arithmetic yourself.Formula
M = P x r(1+r)^n / ((1+r)^n - 1) | P = home price - down payment
Tips
- 20% down avoids PMI — a loan that starts at 82% LTV pays PMI for years, not months.
- Extra payments in the first decade are worth 3-4x the same dollars in the last decade (interest is front-loaded).
- A 15-year term at a lower rate beats a 30-year paid in 15 — compare both before deciding.
- Property taxes rise with reassessment — the first-year numbers understate the long-run escrow.
Frequently asked questions
What is included in a mortgage payment?
Principal, interest, and usually escrowed property tax and homeowners insurance. PMI is added when the down payment is under 20%, and HOA dues are a separate monthly charge many loans carry. This calculator models the full stack so the all-in number is honest.
How does PMI work, and can I avoid it?
PMI (private mortgage insurance) protects the lender when you put down less than 20%. It typically costs 0.3-1% of the loan per year and automatically drops off once your balance falls below 80% of the original value — or when you request removal at current value. A 20% down payment avoids it entirely.
Should I make extra mortgage payments?
At rates above roughly 5%, extra payments beat most guaranteed alternatives — the interest saved is risk-free. But skip them if you have high-interest debt, an undersized emergency fund, or a low mortgage rate while decent bond yields exist. Also confirm your lender applies extras to principal, not to the next payment.
What is the difference between 15-year and 30-year mortgages?
The 15-year carries a lower rate and half the total interest, but a payment roughly 60-70% higher. It forces discipline — if you can handle the payment, the 15-year is the cheaper way to force the math. If not, a 30-year with an extra-payment plan reaches the same destination almost as well.
Why is the amortization schedule front-loaded with interest?
Interest is charged on the current balance, which is largest at the start. In the early years most of each payment is interest; the split flips around the halfway point when principal finally dominates. That is why extra early payments are disproportionately powerful.