Mortgage Calculator

What this calculator does

This calculator estimates the full monthly cost of owning a home financed with a mortgage. It takes the home price, your down payment, the interest rate and the loan term, and computes the monthly principal-and-interest payment. It then adds the other recurring housing costs — property tax, home insurance and any homeowners-association dues — to show a realistic total monthly payment. It also reports the loan amount, the total interest over the term and the total cost of ownership across the whole mortgage.

Why you might need it

The headline number lenders quote is usually just principal and interest, but the cheque you write each month is larger. Property tax and insurance can add hundreds to the monthly figure, and an HOA can add hundreds more. Seeing the complete payment helps you judge what you can genuinely afford and compare homes fairly — a cheaper house with high taxes can cost more per month than a pricier one with low taxes. It is also useful when weighing how much to put down, or how a different term changes both the monthly payment and the lifetime interest.

How to use it

1. Enter the home price.
2. Enter the down payment, then use the toggle to choose whether that number is an amount or a percentage of the price.
3. Enter the annual interest rate and the loan term in years.
4. Optionally enter the annual property tax, annual home insurance and monthly HOA dues. Leave them at zero if they do not apply.
5. Pick your currency and read the total monthly payment and the breakdown.

How it’s calculated

The loan amount is the home price minus the down payment. The monthly principal and interest is found with the standard amortization formula:

M = P × r × (1 + r)^n ÷ ((1 + r)^n − 1)

where P is the loan amount, r is the monthly rate — the annual rate divided by 100 and by 12 — and n is the number of monthly payments, the term in years times 12.

The annual property tax and annual insurance are each divided by 12 to get a monthly figure. HOA dues are already monthly. The total monthly payment is the sum of principal and interest, monthly tax, monthly insurance and HOA. The total cost over the term is the sum of every principal-and-interest payment plus the tax, insurance and HOA paid across all the months.

Common pitfalls

A common mistake is comparing only the principal-and-interest figure between homes; taxes and insurance vary widely by location and property and can flip which home is cheaper. Another is forgetting that property tax and insurance premiums rise over time, so the total here is based on today’s figures. Low down payments often trigger mortgage insurance, an extra monthly cost this calculator does not include. Finally, the interest rate you are quoted may differ from the APR, which folds in certain fees.

Tips

Try a few down-payment levels to see how much the monthly payment moves, then weigh that against keeping cash in reserve. Compare a shorter term with a longer one: the shorter term raises the monthly payment but can save a large amount of interest. To check affordability against your income, use a mortgage affordability calculator alongside this one. Remember the result is an estimate for planning and budgeting, not financial advice or a lender’s quote.

Scope and limitations

This is a pre-qualification estimator, not a substitute for a lender’s Loan Estimate. The two largest cost components it does not model:

• PMI (Private Mortgage Insurance). Any US conventional mortgage with a down payment under 20 % of the home price incurs PMI, typically 0.5–1 % APR of the loan amount — about $80–300 per month for a $300K loan. PMI continues until the loan-to-value ratio drops below 78–80 %. Government-backed FHA loans carry a similar charge called MIP under different rules. The exact rate depends on credit score, LTV and loan type, and varies enough that a generic estimate would mislead more than it helps; a lender produces an accurate figure when you formally apply.
• Closing costs. Origination fees, title insurance, appraisal, recording fees and other one-time charges typically run 2–5 % of the loan amount. They are paid at closing, not month-by-month, and so do not feed into the monthly payment shown here — but they affect whether the financing is feasible in cash terms.

Other items not modeled: discount points (an upfront fee that lowers the interest rate), prepaid escrow (lenders often collect 2–6 months of property tax and insurance upfront), private flood or earthquake insurance where required, and any future increase in property tax or insurance premiums. The annual property-tax and insurance numbers this calculator does take are assumed constant over the term — in reality they typically rise by 2–5 % per year.

Use the headline figure as a starting baseline for budgeting. Get a Loan Estimate from a real lender (free, takes a day) for the binding number before you commit to any specific home.