MORTGAGE CALCULATOR
A fixed-rate mortgage is repaid in equal monthly installments over the term you choose. Each payment covers some interest on the remaining balance plus some principal repayment. In the early years, most of every payment is interest; in the later years, most of it is principal. This pattern is called amortization.
This calculator shows principal and interest only. Your real monthly housing payment usually also includes property tax, homeowners insurance, sometimes PMI (private mortgage insurance) when your down payment is below 20%, and HOA fees if applicable. These vary by location and lender — check your loan estimate document for the full picture. Estimate only. Actual lender quotes, regional taxes, insurance, and qualifying rules will differ.
Updated May 2026 · Built by Lukáš, an architect in Prague.
Formula, assumptions, rounding & limitations
Formula
M = P × [r(1+r)^n] ÷ [(1+r)^n − 1]total interest = (M × n) − Ptotal paid = M × n
Assumptions
- Annual interest rate is divided by 12 for monthly compounding.
- Term is fixed; the monthly payment is constant for the full term.
- Both decimal comma (6,75) and decimal point (6.75) are accepted.
Rounding
- Monthly payment, total interest, and total paid are rounded to the nearest dollar for display.
Limitations
- Principal and interest only — does not include all costs unless entered. Property tax, homeowners insurance, PMI, HOA, escrow, points, lender fees, and closing costs are not modelled.
- Uses the interest rate you enter, not APR. Real lender quotes use APR, which includes fees.
- Adjustable-rate mortgages (ARMs), rate resets, recasting, refinancing, prepayment, and extra principal payments are not modelled.
- Estimate only. Actual lender quotes, regional taxes, insurance, and qualifying rules will differ.
How is a mortgage payment calculated?
The standard amortization formula is M = P × [r(1+r)n] ÷ [(1+r)n − 1], where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments (years × 12). The result M is the fixed monthly payment that fully repays the loan with interest.
What is the difference between APR and interest rate?
The interest rate is the cost of borrowing the principal. The APR (Annual Percentage Rate) includes the interest rate plus other lender fees expressed as a yearly cost. APR is always equal to or higher than the interest rate. This calculator uses the interest rate, not APR.
Should I choose a 15-year or 30-year mortgage?
A 15-year mortgage has higher monthly payments but you pay much less total interest and own the home sooner. A 30-year mortgage has lower monthly payments but you pay more interest overall. Run both numbers in the calculator above and compare the total interest line.
Why is my first payment mostly interest?
Mortgage interest is calculated on the remaining balance. At the start, the balance is highest, so most of your payment goes to interest. As the principal shrinks, more of each payment goes to principal. By the end, almost all of each payment is principal. This pattern is called amortization.
Does this calculator include taxes and insurance?
No. This is principal and interest only (P&I). Property taxes, homeowners insurance, PMI, and HOA fees vary by location and lender and are not part of the loan formula. Your full monthly housing payment will be higher than the number shown here.