Mortgage Calculator
Estimate monthly payments, interest totals, and full amortization schedules.
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Enter your home purchase and financing details
Payment Breakdown
Your estimated monthly outlay & total loan cost
Monthly Cost Components
Overall Loan Lifetime Cost
table_chart Annual Loan Amortization Schedule
expand_moreHow Mortgage Amortization Works
A mortgage is typically an amortizing installment loan where your monthly payment remains fixed across the loan term, but the internal allocation between principal reduction and interest charge shifts each month.
During the early years of a 30-year fixed loan, the vast majority of each monthly check covers accrued bank interest, with only a small slice paying down the actual debt balance. Over time, as the principal balance decreases, monthly interest charges decline, allowing a larger percentage of your payment to build equity.
The Standard Fixed-Rate Mortgage Formula
The monthly principal and interest payment (M) is determined using the standard amortization equation:
Where:
- M = Monthly principal and interest payment.
- P = Total loan amount (Purchase Price − Down Payment).
- i = Monthly interest rate (Annual Rate / 12 / 100).
- n = Total number of monthly installments (Years × 12).
15-Year vs. 30-Year Mortgage Comparison
| Loan Term | Sample Interest Rate | Monthly Payment (P&I on $320,000) | Total Interest Paid Over Life | Total Repaid to Bank |
|---|---|---|---|---|
| 30-Year Fixed | 6.50% | $2,022 / month | $408,187 | $728,187 |
| 15-Year Fixed | 5.75% | $2,658 / month | $158,541 | $478,541 |
Savings Note: Choosing a 15-year term saves over $249,000 in interest and builds full ownership 15 years earlier, at the cost of a $636 higher monthly commitment.
Key Strategies to Lower Your Lifetime Mortgage Cost
- Make One Extra Payment Per Year: Splitting one additional monthly payment across the year (or paying bi-weekly) can cut 4 to 6 years off a 30-year mortgage and save tens of thousands in interest.
- Target a 20% Down Payment: Putting down at least 20% eliminates mandatory PMI premiums, lowering your monthly expense.
- Improve Your Credit Score Prior to Applying: Lenders reserve their lowest mortgage rates for borrowers with FICO scores of 760+. A 0.5% rate decrease on a $400,000 loan saves roughly $35,000 over 30 years.
Frequently Asked Questions
What does PITI stand for?
PITI stands for Principal, Interest, Taxes, and Insurance—the four key components that make up a standard monthly homeowner payment.
What is an escrow account?
An escrow account is managed by your mortgage servicer to collect monthly installments of property taxes and homeowners insurance, which the lender then pays to local authorities and insurers on your behalf when due.