What does this mortgage calculator estimate?
This tool estimates the level principal-and-interest payment for a fixed-rate mortgage and adds the recurring housing costs you enter. The Consumer Financial Protection Bureau describes the common payment components as principal, interest, taxes and insurance—often shortened to PITI. Mortgage insurance may also apply, while HOA dues are usually paid separately.
For a broader installment-loan comparison without housing costs, use the Loan Calculator. Vehicle financing has its own trade-in and sales-tax inputs in the Auto Loan Calculator.
Mortgage payment formula
P is the loan amount after the down payment, r is the monthly interest rate, and n is the number of monthly payments. At a 0% rate, the principal is divided evenly across the term.
Each schedule row calculates interest from the opening balance. The remainder of the scheduled payment reduces principal, followed by any entered extra principal. The final payment is reduced when necessary so the balance does not become negative.
Understanding the monthly housing cost
The result separates principal and interest from property tax, homeowners insurance, mortgage insurance and HOA dues. The initial headline payment is useful for scenario planning, but actual escrow amounts can change when taxes or insurance premiums change.
The optional 80% loan-to-value setting is only a planning assumption. Mortgage-insurance eligibility, duration and cancellation depend on the loan type, payment history, property value and lender or servicer requirements.
How extra principal changes payoff
Extra principal immediately lowers the balance used for later interest calculations. The result compares the entered plan with the same loan and no extra principal, then reports estimated interest savings and months saved.
Confirm that a lender applies the money to principal and check for any prepayment restrictions before relying on the comparison.
Important limitations
- Rates, points, lender fees and closing costs are not estimated automatically.
- Taxes, insurance, mortgage insurance and HOA dues are assumed constant unless you change the inputs.
- The tool does not model escrow shortages, late charges, rate changes, recasting or refinancing.
- Closing costs are included only in the separate cash/outflow estimate and are not added to the loan balance.
Use the Loan Estimate and Closing Disclosure from the lender for transaction-specific terms.
Mortgage calculator FAQs
Sources and methodology
The payment structure and consumer explanations are documented with official CFPB resources.