Mortgage Calculator

How It Works

We use the standard amortization formula: M = P × [r(1+r)^n] / [(1+r)^n - 1], where P is the loan amount, r is the monthly interest rate, and n is the total number of payments.

Example

For a $300,000 mortgage at 6% interest for 30 years: monthly payment = $1,798.65, total interest = $347,514.

How to Interpret Your Result

• Monthly Payment: This is your principal and interest (P&I) only. It does not include property taxes, homeowners insurance, or PMI. Your actual monthly housing cost will be higher.
• Total Interest: Over a 30-year loan, you may pay more in interest than the home's purchase price. This is why shorter loans or extra payments save so much money.
• Interest Ratio: If interest is 115% of your principal, it means for every $1 you borrowed, you pay $1.15 in interest. A 15-year loan dramatically reduces this ratio.

Assumptions

This calculator assumes a fixed-rate mortgage with equal monthly payments for the full term. It does not account for property taxes, homeowners insurance, PMI (private mortgage insurance), HOA fees, or closing costs. Adjustable-rate mortgages (ARMs) have payments that change over time and are not accurately represented here.

Common Mistakes

• Forgetting the full housing cost: Principal + interest is only part of your monthly payment. Add property tax and insurance (escrow) for your true monthly cost.
• Ignoring the total interest: A $300,000 loan at 6% for 30 years costs $647,514 total — more than double the purchase price. A 15-year term at the same rate costs far less.
• Using the sticker rate, not the APR: The APR includes lender fees and is a better comparison tool than the nominal interest rate.

Frequently Asked Questions

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