Mortgage & Loan Calculator

Every fixed-rate mortgage or loan payment uses the same amortization formula:

M = P × [r(1+r)^n] ÷ [(1+r)^n − 1]

Where M is your monthly principal & interest payment, P is the loan amount (home price minus down payment), r is your monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments (loan term in years × 12).

Say you're financing $280,000 (a $350,000 home with a $70,000, or 20%, down payment) at 6.5% over 30 years. Monthly rate r = 0.065 ÷ 12 = 0.005417, and n = 360 payments. Plug that into the formula and you get a payment of $1,769.79 per month, about $637,125 total over 30 years, of which roughly $357,125 is interest.

That amortization isn't linear. The very first payment on this loan is $1,516.67 interest and only $253.12 principal, because interest is charged on the full $280,000 balance. By the final year, that ratio has flipped almost completely: nearly the whole payment goes to principal since the remaining balance is small. It's why paying down a mortgage early has such an outsized effect in the early years.

PITI (Principal, Interest, Taxes, and Insurance) is what most lenders mean by your "full monthly payment." It's usually higher than the principal-and-interest number alone.

• Principal & interest: repays the loan itself, fixed for the life of a fixed-rate loan.
• Property tax: set by your local government, typically collected monthly and held in escrow.
• Homeowners insurance: required by most lenders, also usually escrowed and paid annually on your behalf.
• PMI (private mortgage insurance): required on most conventional loans with less than 20% down, and typically removable once you reach 20% equity.
• HOA dues: not part of your loan at all, but a separate recurring cost in many communities that still affects what you can actually afford each month.

Back to that $280,000 loan with its $1,769.79 principal & interest payment. Add $3,600/year property tax ($300/mo), $1,200/year insurance ($100/mo), and $140/mo PMI, and the full PITI payment climbs to $2,309.79 per month, about 30% higher than the principal-and-interest figure alone. That gap is exactly why comparing loan offers on P&I only can be misleading.

Any extra amount you pay beyond your required monthly payment goes entirely toward your principal balance. Since interest gets recalculated on that lower balance every month after, extra payments keep paying you back for the rest of the loan.

Take that same $280,000 loan at 6.5% over 30 years. Add just $200/month extra toward principal and it pays off in about 22 years 9 months instead of 30, saving 7 years 3 months and roughly $101,300 in interest, for a total extra outlay of only around $54,600.

The earlier you start paying extra, the more you save, since more of each early payment would otherwise have gone to interest on a larger balance. A modest, sustainable extra payment you can actually keep up tends to beat sporadic lump-sum payments over time.

A 15-year loan costs about $670 more per month in this example, but pays off in half the time and saves roughly $198,000 in total interest compared to the 30-year term. That comes from both the shorter timeline and the lower rate lenders typically offer on shorter terms.

The right choice depends on your monthly budget as much as the total savings. A 30-year term keeps payments lower and more resilient to income changes, while a 15-year term builds equity faster and cheaper if you can afford the higher payment. Use the loan term buttons above to compare any two terms side by side on your own numbers.