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Back to Finance CalculatorsUnderstanding Your Mortgage Payment
A mortgage calculator is an essential tool for anyone planning to buy a home. It helps you estimate your monthly mortgage payment, including principal, interest, property taxes, homeowners insurance, and PMI if applicable. Understanding these costs before you buy helps you budget effectively and avoid financial stress.
Our free mortgage calculator shows you exactly what to expect. For example, on a $300,000 home with a 20% down payment ($60,000), a 30-year loan at 7% interest would result in a monthly payment of approximately $1,597 for principal and interest alone. Adding property taxes and insurance typically increases the total to around $2,200-$2,500 per month depending on your location.
The calculator also shows your total cost over the life of the loan. Using the example above, you would pay approximately $334,920 in interest over 30 years, meaning the total cost of your $240,000 loan would be $574,920. This insight helps you make informed decisions about loan terms, down payments, and overall affordability.
Frequently Asked Questions
What is included in my monthly mortgage payment?
Your monthly mortgage payment typically includes four components, often called PITI: Principal (loan repayment), Interest (cost of borrowing), property Taxes, and homeowners Insurance. If your down payment is less than 20%, you may also pay PMI (Private Mortgage Insurance) until you reach 20% equity.
How does my down payment affect my mortgage?
A larger down payment reduces your loan amount, resulting in lower monthly payments and less interest paid over time. Additionally, putting down 20% or more eliminates the need for PMI, saving hundreds of dollars monthly. For example, a 20% down payment on a $300,000 home means borrowing $240,000 instead of $270,000 with 10% down.
Should I choose a 15-year or 30-year mortgage?
A 15-year mortgage has higher monthly payments but significantly lower total interest. A 30-year mortgage offers lower monthly payments but costs more over time. Choose based on your budget and financial goals. For example, a $200,000 loan at 7% costs about $1,797/month for 15 years or $1,331/month for 30 years, but you'll pay $123,460 vs $279,160 in total interest respectively.
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