Mortgage Calculator

A mortgage is a loan secured by real estate: the lender advances the money to buy the home, and you repay it — usually over 15 or 30 years — through fixed monthly payments made up of principal (the amount borrowed) and interest (the cost of borrowing it). The most common structure is a fixed-rate mortgage, where the interest rate stays the same for the entire term, so the payment never changes even though the mix of principal and interest within each payment shifts over time — early payments are mostly interest, later payments are mostly principal.

Your down payment is the upfront portion of the home price you pay yourself; the rest becomes your loan amount. A larger down payment usually means a lower interest rate and better approval odds. If you put down less than 20%, lenders typically require private mortgage insurance (PMI), which protects the lender — not you — against default. PMI is normally required only until your remaining loan balance drops below 80% of the home's original price, after which it's no longer charged; this calculator applies that same 80% cutoff automatically.

Beyond principal and interest, most homeowners also pay property taxes (set by local government, often around 1% of home value per year), homeowners insurance (protecting against damage and liability), and sometimes HOA fees (charged by a homeowners' association for shared property upkeep). These recurring costs are commonly bundled into one monthly payment through an escrow account. This calculator doesn't include one-time costs like closing fees or renovations, which can add several thousand dollars to the upfront cost of buying a home.

Making extra payments toward principal reduces the total interest paid and shortens the loan term, since early payments on a long-term loan go mostly toward interest rather than principal. Before doing so, weigh the benefits against the drawbacks: some loans charge prepayment penalties, the money used for extra payments can't be invested elsewhere (an opportunity cost), and paying down a low-interest mortgage early is often less valuable than investing the difference — especially since mortgage interest may be tax-deductible in some places.