How the mortgage calculator works
A mortgage is an amortizing loan: you repay it in equal periodic payments, and each payment covers the interest due that period plus a slice of the remaining balance (the principal). Early on, most of your payment is interest because the balance is large; as the balance shrinks, more of each payment goes to principal.
This calculator first works out your loan amount (home price minus down payment), then computes the fixed monthly principal & interest payment, and finally adds your monthly property tax, home insurance, and any HOA dues to give the full monthly housing cost — often abbreviated PITI.
The formula
The fixed monthly principal-and-interest payment is calculated as:
- M — monthly principal & interest payment
- P — loan amount (principal)
- r — monthly interest rate (annual rate ÷ 12)
- n — total number of payments (years × 12)
A worked example
Suppose you buy a home for 350,000 with 20% down, leaving a 280,000 loan at a 6.5% annual rate over 30 years. The monthly rate is 6.5% ÷ 12 ≈ 0.00542, and there are 360 payments. Plugging into the formula gives a principal-and-interest payment of about 1,770 per month. Over 30 years you would repay roughly 637,000 in total — meaning about 357,000 in interest on top of the original 280,000 borrowed. Adding property tax and insurance raises the full monthly payment further. Use the inputs above to model your own numbers and currency.
What affects your payment
- Loan amount — a bigger down payment shrinks the loan and the interest you pay.
- Interest rate — even a 0.5% difference changes the lifetime cost substantially.
- Term — a 15-year loan has higher monthly payments but far less total interest than a 30-year loan.
- Taxes & insurance — these vary widely by location and are added to your monthly escrow.
- PMI — with less than 20% down, lenders usually require private mortgage insurance until you build enough equity.
Frequently asked questions
How is my monthly mortgage payment calculated?
The principal-and-interest portion uses the standard amortizing-loan formula based on your loan amount, monthly interest rate, and number of payments. CalcNow then adds your monthly property tax, home insurance, and any HOA fee to show your full housing payment.
What is included in the total monthly payment?
It combines four parts often called PITI plus HOA: Principal, Interest, Taxes, and Insurance, plus any homeowners-association dues. Principal and interest go to your lender; taxes and insurance are typically collected into an escrow account.
Does a larger down payment lower my payment?
Yes. A larger down payment reduces the loan amount, which lowers both your monthly principal-and-interest and the total interest paid over the life of the loan. Putting down 20% or more also usually removes the need for private mortgage insurance (PMI).
What is an amortization schedule?
It is a month-by-month (or year-by-year) breakdown showing how each payment splits between interest and principal, and how your remaining balance falls over time. Early payments are mostly interest; later payments are mostly principal.
Is this calculator accurate for my country?
The math is universal, so the calculator works anywhere — only the currency changes. CalcNow auto-detects your currency from your location, and you can switch it at any time. Tax and insurance rules vary by country, so enter your local figures for the most accurate estimate.
CalcNow provides estimates for informational purposes only and does not constitute financial advice. Confirm exact figures with your lender.