Home buying tool · Free · No email required
Mortgage Payment Calculator
The listing price is the least honest number in housing. Enter the home price, down payment, rate, and term to see the real monthly principal & interest — and the quietly enormous total interest behind it.
Loan term
Monthly principal & interest
$2,023
30-year fixed at 6.5% · taxes & insurance not included
Where the money goes over 30 years
First payment sends roughly $1,733 to interest. Budget separately for property tax, insurance, and maintenance — lenders often want total housing costs under 28% of gross income (the 28/36 rule).
How the math works
A fixed-rate mortgage payment is an annuity: M = P × [r(1+r)ⁿ] ÷ [(1+r)ⁿ − 1], where P is the loan amount (price minus down payment), r is the monthly rate, and n is the number of months. The formula guarantees the balance hits exactly zero after the final payment.
The part that surprises first-time buyers: early payments are mostly interest. On a $320,000 loan at 6.5%, roughly $1,733 of the first $2,023 payment goes to the bank, not the house. That's why one extra principal payment in year one can delete many payments from the back end — and why shorter terms, though pricier monthly, can save six figures of interest.
Remember what this number excludes: property tax, homeowners insurance, HOA dues, and maintenance (budget 1–2% of the home's value a year). Lenders judge affordability with the 28/36 rule — housing under 28% of gross income, all debts under 36%.
Frequently asked questions
How much house can I afford?
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A common ceiling is the 28/36 rule: total housing costs (payment, tax, insurance) at or under 28% of gross monthly income, and all debt payments under 36%. A safer personal rule is what lets you keep saving 15%+ for retirement — the bank's maximum isn't your maximum.
Is a 15-year or 30-year mortgage better?
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A 15-year term carries a lower rate and far less total interest, but a meaningfully higher required payment. A 30-year preserves flexibility — you can always pay it like a 15 in good months and fall back in bad ones. Risk-averse planners often take the 30 and prepay voluntarily.
Does a bigger down payment really save that much?
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Yes, twice over: you borrow less (smaller payment, less interest), and crossing 20% down typically removes private mortgage insurance, which otherwise runs $30–$70 per month per $100,000 borrowed.
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