Mortgage Calculator
Monthly payment · PITI · Total interest · Amortization schedule · PMI · Extra payments · 20 currencies
How to Use This Mortgage Calculator
The Mortgage Payment Formula
All fixed-rate mortgage payments are calculated using the standard amortization formula, which produces equal payments that cover both interest and principal, reducing the balance to exactly zero on the final payment:
PITI: The True Monthly Mortgage Cost
Your actual monthly housing cost - called PITI - is typically much higher than just the P&I (principal and interest) payment. PITI stands for:
- Principal (P): The portion that reduces your loan balance. Starts small and grows over time as interest decreases.
- Interest (I): The lender's fee, charged monthly on the outstanding balance. Highest in early payments, decreasing each month.
- Taxes (T): Property taxes, typically collected monthly via escrow and paid to your local government. US average: ~1.1% of home value annually.
- Insurance (I): Homeowner's insurance (required by lenders) plus PMI if your down payment is under 20%.
What Is PMI and When Does It End?
PMI (Private Mortgage Insurance) is required when your down payment is less than 20% of the home price (loan-to-value ratio above 80%). It protects the lender - not you - against default. PMI typically costs 0.5-1.5% of the loan amount per year, or roughly $50-$150/month per $100,000 borrowed.
Under the Homeowners Protection Act of 1998, lenders must automatically cancel PMI when your loan balance reaches 78% of the original purchase price. You can also request cancellation at 80% LTV if your home hasn't declined in value. Enter your PMI rate in the Taxes & Insurance section above to see exactly when your PMI drops off.
Understanding Amortization
Amortization is the process of gradually paying down a loan through fixed equal payments. In the early years of a mortgage, the vast majority of each payment goes toward interest - not principal. For example, on a $320,000 loan at 6.57%, your very first payment of $2,046 breaks down as roughly $1,762 interest and $284 principal. By payment 300, it's approximately $900 interest and $1,146 principal.
This is why extra payments made early in a mortgage save dramatically more interest than the same extra payments made later - they eliminate future high-interest payments first.
Extra Mortgage Payments: How Much Do They Save?
Even small extra payments made consistently can cut years off your mortgage and save tens of thousands in interest. Here's what extra payments do on a $320,000 loan at 6.57% over 30 years:
| Extra Monthly Payment | Interest Saved | Loan Paid Off | Time Saved |
|---|---|---|---|
| $0 (baseline) | - | 30 years | - |
| $100/month | ~$31,500 | ~26.5 years | 3.5 years earlier |
| $200/month | ~$57,000 | ~23.5 years | 6.5 years earlier |
| $500/month | ~$106,000 | ~18 years | 12 years earlier |
| One extra payment/year | ~$45,000 | ~25 years | 5 years earlier |
15-Year vs 30-Year Mortgage: Full Comparison
The two most common mortgage terms differ dramatically in total interest paid and monthly payment:
| Scenario | Monthly Payment | Total Interest | Total Paid |
|---|---|---|---|
| $320,000 at 6.57% - 30 years | $2,046 | $416,572 | $736,572 |
| $320,000 at 6.00% - 15 years | $2,703 | $166,500 | $486,500 |
| Difference | +$657/mo for 15-yr | Save $250,000 with 15-yr | Save $250,072 |
The 15-year mortgage saves roughly $250,000 in interest, but requires $657/month more. The decision depends on your cash flow, investment opportunities, and risk tolerance. If you can invest the $657 difference at a higher return than 6%, the 30-year mortgage may actually be financially optimal.