Mortgage Calculator (2024)

Most people need a mortgage to finance a home purchase. Use our mortgage calculator to estimate your monthly house payment, including principal and interest, property taxes, and insurance. Try out different inputs for the home price, down payment, loan terms, and interest rate to see how your monthly payment would change.

Mortgage Calculator Results Explained

To use the mortgage calculator, enter a few details about the loan, including:

• Home price: The purchase price of the home.
• Down payment: The cash you pay upfront to buy a home, expressed as a percentage of the full loan amount. The size of your down payment can affect your interest rate—lenders typically offer lower rates if you make a larger down payment. (Default setting = 20%.)
• Loan term: The amount of time you have to repay the loan. In general, the longer the term, the lower your monthly payment, but the more interest you will pay overall. The shorter the term, the higher your monthly payment and the less interest you will pay. (Default setting = 30 years.)
• Loan APR: The cost to borrow the money, expressed as a percentage of the loan. Alternatively, enter your credit score range to see an interest rate estimate. (Default setting = last month's national average.)
• Property taxes: The annual tax you pay as a real property owner, levied by your city, county, or municipality. (Default setting = the national average.)
• Homeowners insurance: Your annual cost to insure your home and belongings against theft, fire, natural disasters, personal liability claims, and other covered perils. Mortgage lenders require borrowers to buy home insurance coverage. If you live in a flood-prone area, your lender may also require flood insurance. And if you're in an area that's vulnerable to seismic activity, you may need earthquake coverage. (Default setting = the national average.)
• HOA fees: The monthly amount you pay to your homeowners' association (HOA), if the property you are considering has one, to help cover the costs of maintaining and improving the properties and amenities within the association.

Costs Often Included in a Monthly Mortgage Payment

Monthly mortgage payments typically include four costs—principal, interest, taxes, and insurance, collectively known as PITI. Here's a closer look at each one:

• Principal: The amount you borrow and have to pay back. Mortgages are structured so that the amount of principal you repay each month starts low and increases over time.
• Interest: The cost to borrow the money. In the early years of your loan, more of your monthly payment applies to interest. Eventually, that shifts so that more of your payment goes toward the principal. On a 30-year fixed-rate mortgage, that "tipping point" happens about halfway through the loan term.
• Taxes: Everyone who owns real property (i.e., real estate) owes property taxes. Local governments collect these taxes to help fund projects and services that benefit the entire community—such as roads, schools, hospitals, and emergency services. If you have a mortgage, your property tax bill may be included as part of your monthly mortgage payment. If so, the lender collects the payments and holds them in escrow until your tax bill is due.
• Insurance: Your monthly mortgage payment might include two types of insurance if your lender requires them: home insurance and private mortgage insurance (PMI). Home insurance protects your home and belongings against theft, fire, natural disasters, personal liability claims, and other covered perils. Private mortgage insurance is required if you have a conventional mortgage and make a down payment of less than 20% of the home's purchase price.

If your condominium, co-op, or neighborhood has a homeowners' association (HOA), you may also owe HOA dues. Although these fees aren't usually part of a mortgage payment, some mortgage servicers will, upon request, include them in the escrow portion of the payment.

How to Calculate Monthly Mortgage Payments

You can use our mortgage calculator to calculate your monthly payment (the easy way), or you can do it yourself if you're up for a little math. Here's the standard formula to calculate your monthly mortgage payment by hand. To figure out your monthly mortgage payment ("M"), plug in the principal ("P"), monthly interest rate ("i"), and number of months ("n") from your loan and solve:

$\begin{aligned}&M = \frac{ P \left [ i (1 + i) ^ n \right ] }{ \left [ (1 + i) ^ n - 1 \right ] } \\&\textbf{where:} \\&P = \text{Principal loan amount (the amount you borrow)} \\&i = \text{Monthly interest rate} \\&n = \text{Number of months required to repay the loan} \\\end{aligned}$​M=[(1+i)n−1]P[i(1+i)n]​where:P=Principalloanamount(theamountyouborrow)i=Monthlyinterestraten=Numberofmonthsrequiredtorepaytheloan​

How to Calculate My Mortgage Interest

Interested in calculating just your mortgage interest? There's a formula for that, too. Here's a quick way to calculate one month of mortgage interest:

$\begin{aligned} &\text{Monthly Interest} = \frac{ \text{Loan Balance} \times \text{Interest Rate} }{ 12 } \\ \end{aligned}$​MonthlyInterest=12LoanBalance×InterestRate​​

For example, say you have a $150,000 loan balance with a 5% interest rate. Your interest payment for the month would be:

$\begin{aligned} &\frac{ ( \$150,000 \times 0.05 ) }{ 12 } \text{, or } \frac{ \$7,500 }{ 12 } = \$625.00 \\ \end{aligned}$​12($150,000×0.05)​,or12$7,500​=$625.00​

Remember that your balance changes each month after you make a mortgage payment. Be sure to use the new balance to calculate the next month's interest.

What Is the Average Interest Rate on a Mortgage?

Mortgage interest rates change day-to-day and are influenced by various economic factors, including:

• Inflation
• The level of economic growth
• Federal Reserve monetary policy
• Interest rates in other markets
• The bond market
• Housing market conditions

Shown below are the average monthly rates for 30-year fixed-rate mortgages from January 2010 to September 2023, according to the Federal Reserve Bank of St. Louis:

Of course, the interest rate you see at the closing table could be higher or lower than the average rate. That's because your interest rate depends on what's happening in the economy at large—plus individual factors, such as the following:

• Credit score
• Location
• Home price and loan amount
• Down payment
• Loan term
• Interest rate type (fixed or adjustable)
• Loan type
  

How to Choose the Best Mortgage

If you're like most people, a mortgage represents the largest long-term debt obligation you'll ever have. Choosing the right mortgage can set you up for success and help minimize the overall costs of buying the home. Here are four tips to help you shop for the best mortgage.

Determine How Much You Can Afford

A home is a large purchase, and you may wonder how much you can realistically afford. Try various scenarios on a mortgage calculator to find out what your optimal loan might look like. No matter how much loan you qualify for, keep in mind that you don't have to borrow the entire amount.

Compare Mortgage Loan Term Lengths

A 30-year fixed-rate mortgage is the most popular loan type, but it's not your only option. Use a mortgage calculator to see how various loan terms impact your monthly payment, the amount of interest you'll pay, and the total cost of the home. Remember, a longer loan term means lower monthly payments, but you'll end up paying more interest over the life of the loan.

This chart compares how monthly payments and total interest differ for a home price of $312,500, a down payment of $62,500, a fixed-rate $250,000 loan at 7.2% (for the remainder of the price), property taxes of $2,188 per year, and homeowners' insurance of $91 per month. Length, or term, dictates how much you'll pay in interest and total. Rates change in the table because lenders generally use lower rates with shorter terms.