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 important financial tools for anyone buying a home, refinancing an existing mortgage, or comparing loan options. Before you sign a mortgage agreement for what is likely the largest financial commitment of your life, understanding exactly what your monthly payment will be — and how much of it goes to interest versus principal — puts you in full control of the decision. Our free mortgage calculator instantly shows your estimated monthly payment based on the home price, down payment amount, annual interest rate, and loan term. It works for first-time homebuyers, property investors, and existing homeowners exploring refinancing scenarios. The calculator is optimised for borrowers in the USA (30-year and 15-year fixed mortgages), UK (2-year and 5-year fixed terms with variable Standard Variable Rates), Canada (5-year fixed terms with 25-year amortisation periods), and Australia (principal-and-interest and interest-only home loans). In addition to the monthly payment, it generates a full amortisation schedule showing exactly how each payment is split between interest and principal reduction across the entire loan term, and calculates the total interest you will pay over the life of the mortgage — a number that often surprises first-time buyers.
Formula
M = P x [r(1+r)^n] / [(1+r)^n - 1] where P = principal, r = monthly rate, n = total payments
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 350,000 home with 20% down payment ($70,000) gives a principal of $280,000. At 7.0% annual interest over 30 years: monthly rate = 7/12/100 = 0.005833; n = 360; M = 280,000 x [0.005833(1.005833)^360] / [(1.005833)^360 - 1] = approximately $1,863/month principal and interest. Total paid over 30 years = $1,863 x 360 = $670,680 — meaning $390,680 in total interest on top of the $280,000 principal. The amortisation schedule shows that in the first payment, only $237 of the $1,863 goes to principal — the remaining $1,626 is pure interest. This ratio gradually reverses over the loan's life.
Tips & Best Practices
- ✓A 20% down payment eliminates Private Mortgage Insurance (PMI) in the USA, which costs $100-200 per month on most loans — PMI protects the lender, not you, and is purely an added expense until you reach 20% equity.
- ✓Each 0.5% reduction in mortgage interest rate on a $300,000 loan saves approximately $85 per month — shopping multiple lenders and improving your credit score before applying are the two highest-leverage actions a buyer can take.
- ✓A 15-year mortgage builds equity twice as fast as a 30-year mortgage and saves enormous amounts of interest, but the monthly payment is typically 30-40% higher. Run both scenarios in the calculator to compare.
- ✓Extra principal payments early in the loan save disproportionately more interest: an extra $200/month in years 1-5 saves more than $200/month paid in years 20-25 because early payments eliminate decades of compounding interest.
- ✓The amortisation table reveals a surprising fact: you do not reach 50% equity on a 30-year mortgage until approximately year 20 because early payments are predominantly interest.
- ✓Mortgage points (discount points): paying 1% of the loan upfront typically reduces the rate by 0.25% — calculate the break-even period (upfront cost divided by monthly savings) to determine if buying points makes financial sense.
- ✓PITI payment: lenders calculate affordability using Principal + Interest + Taxes + Insurance (PITI). Add your estimated annual property taxes and homeowner's insurance to the calculator result for a complete monthly housing cost.
- ✓UK mortgage note: Standard Variable Rates (SVR) can change at any time after a fixed-rate period ends. Always model what your payment would be at SVR+2% as a stress test before committing to a mortgage.
Who Uses This Calculator
First-time homebuyers use the mortgage calculator before beginning their home search to establish a realistic budget — knowing your maximum comfortable monthly payment, then working backwards through the formula, reveals the maximum home price you can afford at current interest rates. Existing homeowners considering refinancing compare their current payment against what a new loan at today's rates would cost, calculating break-even periods for closing costs. Property investors model cash flow projections for rental properties, ensuring that rental income will cover the mortgage payment, property taxes, insurance, and maintenance with adequate margin. Mortgage brokers and bank loan officers use payment calculators to quickly illustrate loan scenarios for clients during consultations. Real estate agents use mortgage calculators to help clients understand the true monthly cost of properties at different price points. Financial planners incorporate mortgage calculations into comprehensive retirement and net-worth projections. Home sellers use refinance and equity calculators to understand how much they will net from a sale after paying off their mortgage.
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.