Mortgage Calculator
Calculate your monthly mortgage payment, total interest, and amortization schedule. Free mortgage calculator for USA, UK, Canada & Australia.
Educational purpose only. Results are estimates based on standard formulas. This calculator does not constitute financial, tax, legal, or medical advice. For decisions affecting your personal finances or health, consult a qualified professional. How we ensure accuracy →
About the Mortgage Calculator
A mortgage calculator is one of the most essential financial tools for anyone buying a home, refinancing an existing mortgage, or comparing loan options. Before you sign a mortgage agreement — likely the largest financial commitment of your life — understanding exactly what your monthly payment will be, and how much of it goes toward interest versus principal, puts you firmly in control of the decision. Our free mortgage calculator instantly shows your estimated monthly payment based on the home price, down payment, annual interest rate, and loan term. It also generates a complete amortization schedule showing how each payment is divided between interest and principal across the entire loan life, and calculates the total interest you will pay — a number that routinely surprises first-time buyers. The calculator is built for borrowers across the USA, UK, Canada, Australia, and New Zealand. American buyers can model 30-year and 15-year fixed mortgages, compare conventional versus FHA loan scenarios, and see how PMI adds to monthly cost when the down payment is below 20%. UK borrowers can evaluate 2-year and 5-year fixed-rate products and model what happens when the deal ends and Standard Variable Rate kicks in. Canadian buyers can work with 25-year amortisation periods and five-year fixed terms, the standard structure in that market. Australian borrowers can compare principal-and-interest repayments against interest-only periods common in investment lending. Knowing your mortgage payment before you shop for a home is not just useful — it is transformative. Most first-time buyers start with a home price in mind and then discover what it costs. Experienced buyers and financial planners flip this: they start with the monthly payment they can comfortably afford, back-calculate through the formula to find the maximum home price, and use that as a hard ceiling before they begin searching. That single mental shift prevents the heartbreak of falling in love with an unaffordable home and the financial damage of overextending on a mortgage. Beyond the monthly payment, the total interest figure revealed by the amortization schedule is perhaps the single most motivating number in personal finance. A $350,000 mortgage at 7% over 30 years generates over $490,000 in total interest — meaning you pay back nearly $840,000 for a $350,000 loan. Understanding this reality motivates smarter decisions: larger down payments, shorter loan terms, extra principal payments, and aggressive rate shopping — all of which can save tens of thousands of dollars over the loan life.
Formula
M = P x [r(1+r)^n] / [(1+r)^n - 1] where P = principal, r = monthly interest rate (annual rate / 12), n = total payments (years x 12)
How It Works
The mortgage payment formula used by every lender worldwide is: M = P multiplied by [r(1+r)^n] divided by [(1+r)^n minus 1]. In this formula, M is the monthly payment, P is the principal loan amount (home price minus down payment), r is the monthly interest rate (annual rate divided by 12), and n is the total number of monthly payments (loan term in years multiplied by 12). Example: a USD 400,000 home with a 20% down payment ($80,000) gives a principal of $320,000. At 7.0% annual interest over 30 years, the monthly rate is 0.005833 and n equals 360. Monthly payment M = 320,000 x [0.005833 x (1.005833)^360] / [(1.005833)^360 minus 1] equals approximately $2,129 per month for principal and interest. Total paid over 30 years = $2,129 x 360 = $766,440, meaning $446,440 in total interest beyond the $320,000 principal. The amortization schedule reveals that in the very first payment, only $253 of that $2,129 reduces the principal — the remaining $1,876 is pure interest cost. This ratio gradually reverses over the loan life, with later payments being predominantly principal. By year 20, the monthly split is roughly equal. Understanding this structure is the foundation of every smart mortgage decision: from the value of extra payments in early years to the wisdom of refinancing at the right time.
Tips & Best Practices
- ✓A 20% down payment eliminates Private Mortgage Insurance (PMI) in the USA and Lenders Mortgage Insurance (LMI) in Australia — insurance that protects the lender, not you, and costs $100-300 per month on most loans. Saving to this threshold before buying is almost always worth the extra time.
- ✓Each 0.5% reduction in your mortgage interest rate on a $300,000 loan saves approximately $85 per month or over $30,000 across a 30-year term. Shopping at least three lenders and improving your credit score before applying are the two highest-leverage actions any buyer can take.
- ✓A 15-year mortgage builds equity twice as fast as a 30-year loan and saves enormous total interest, but the monthly payment is typically 30-40% higher. Run both scenarios in the calculator before deciding — many buyers find the 20-year term hits the ideal balance of manageable payment and faster payoff.
- ✓Extra principal payments early in the loan save disproportionately more than the same payment made later. An extra $200 per month in years one through five eliminates more future interest than $200 extra in years twenty through twenty-five, because early payments eliminate decades of compounding interest costs.
- ✓The amortization table reveals a surprising truth: on a standard 30-year mortgage, you do not reach 50% equity through payments alone until approximately year twenty. This is why extra payments and rising home values are so important — payments alone build equity painfully slowly in the early years.
- ✓Mortgage points, also called discount points, allow you to pay 1% of the loan upfront in exchange for approximately 0.25% rate reduction. Calculate the break-even period (upfront cost divided by monthly savings) to determine whether buying points makes financial sense for your expected stay in the home.
- ✓PITI payment: lenders calculate affordability based on Principal plus Interest plus Taxes plus Insurance. Add your estimated annual property taxes and homeowners insurance to the mortgage calculator result to see your true total monthly housing cost before committing.
- ✓UK Standard Variable Rate warning: fixed-rate deals in the UK typically last two to five years, after which the lender moves you to the SVR, which can be significantly higher and can change at any time. Always stress-test your budget at SVR plus 2% before committing to any UK mortgage product.
Who Uses This Calculator
First-time homebuyers in the USA, Canada, Australia, and New Zealand use the mortgage calculator before beginning their home search to establish a firm budget ceiling — knowing what maximum monthly payment they are comfortable with, then working backward through the formula, reveals the maximum home price they should target. Existing homeowners across the UK and US consider refinancing when rates drop and use the calculator to model their new payment and break-even timeline on closing costs. Property investors in Australia model cash flow projections for rental properties, verifying that expected rent will cover the mortgage, rates, insurance, and maintenance with adequate margin. Couples planning a joint purchase model how combining incomes changes the maximum affordable loan versus what either could manage alone. Mortgage brokers and bank loan officers use payment calculators daily to illustrate loan scenarios for clients during consultations, comparing 15-year versus 30-year terms and different rate options. Financial planners incorporate mortgage calculations into comprehensive net-worth projections, especially when modelling early payoff strategies or the impact of directing extra income toward principal versus investing in a retirement account.
Optimised for: USA · Canada · UK · Australia · Calculations run in your browser · No data stored
Frequently Asked Questions
How is a monthly mortgage payment calculated?
Monthly payment (M) = P × [r(1+r)^n] / [(1+r)^n − 1], where P = principal loan amount, r = monthly interest rate (annual rate ÷ 12), and n = total number of payments (years × 12). Example: $300,000 loan at 7% for 30 years → monthly rate = 0.005833, n = 360, payment = $1,996/month.
What is a good mortgage interest rate in 2026?
As of 2026, the US 30-year fixed mortgage rate has been in the 6.5–7.5% range for borrowers with good credit (720+ score). Rates below the market average are available to borrowers with 800+ credit scores, 20%+ down payments, and strong debt-to-income ratios. Always compare at least 3 lenders to find your best available rate.
How much mortgage can I afford?
Use the 28/36 rule: your monthly mortgage payment (principal + interest + taxes + insurance) should not exceed 28% of gross monthly income, and total debt payments should not exceed 36%. On a $100,000 annual salary ($8,333/month), maximum comfortable mortgage payment = $2,333/month, which supports roughly a $350,000–380,000 loan at current rates.
How much is a down payment on a house?
Conventional loans typically require 3–20% down. FHA loans require 3.5% down (with 580+ credit score). VA loans (veterans) and USDA loans (rural areas) require 0% down. Putting 20% down eliminates Private Mortgage Insurance (PMI), which costs $100–300/month on most loans. A $350,000 home requires $70,000 for a 20% down payment.
What is the difference between a 15-year and 30-year mortgage?
On a $300,000 loan at 7%: 30-year = $1,996/month, total interest paid = $418,527. 15-year = $2,696/month, total interest paid = $185,368. The 15-year saves $233,159 in interest but requires $700 more per month. If you can afford the higher payment, the 15-year is dramatically cheaper overall. Use the mortgage calculator to compare your exact numbers.
What is PMI and when can I stop paying it?
Private Mortgage Insurance (PMI) protects the lender (not you) if you default. It is required when your down payment is less than 20% on a conventional loan. PMI costs 0.5–1.5% of the loan amount annually, or roughly $100–300/month on a $250,000 loan. You can request PMI cancellation once you reach 20% equity; it is automatically cancelled at 22% equity under the Homeowners Protection Act.
How does an amortization schedule work?
Amortization describes how each payment splits between interest and principal over the loan term. In early payments, most of your money goes to interest — on a 30-year mortgage, your first payment might be 85% interest and 15% principal. As the balance decreases, more goes to principal. After 15 years, you still owe roughly 65% of the original balance because of this front-loaded interest structure.
Should I refinance my mortgage?
Refinancing makes financial sense when your new rate is at least 0.5–1% lower than your current rate and you plan to stay long enough to recoup closing costs (typically $3,000–6,000). Break-even calculation: closing costs ÷ monthly savings = months to break even. If you save $200/month and closing costs are $4,000, break-even = 20 months. The mortgage calculator can model refinance scenarios.
What is the mortgage process in the UK?
UK mortgages are typically offered as 2-year or 5-year fixed rates, then revert to the lender's Standard Variable Rate (SVR). The Bank of England base rate heavily influences UK mortgage rates. Most UK buyers put down 5–25% deposit. Stamp Duty Land Tax (SDLT) applies on purchases above £250,000. Use the mortgage calculator and select UK mode for localised calculations.
How do extra mortgage payments save money?
Extra principal payments reduce your balance faster, which reduces future interest charges dramatically. On a $300,000 30-year mortgage at 7%, paying an extra $200/month saves approximately $81,000 in total interest and pays off the mortgage 5.5 years early. The earlier in the loan term you make extra payments, the greater the interest savings due to compound effects.