BCBetter Calculators

Mortgage Calculator

Calculate your monthly mortgage payment, total interest paid, and full amortization breakdown.

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Enter your values and click Calculate

How It Works

The monthly mortgage payment is calculated using the standard fixed-rate amortization formula: M = P × [r(1+r)^n] ÷ [(1+r)^n − 1]. Here P is the loan principal (home price minus down payment), r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments (loan term in years × 12). For a 30-year loan at 7.0%, r = 0.07 ÷ 12 = 0.005833 and n = 360. This formula produces a fixed amortizing payment — every monthly payment is the same dollar amount, but its composition changes over time. Early payments are mostly interest; later payments are mostly principal reduction. This gradual shift is called amortization. The total interest paid over the life of the loan is: Total Interest = (M × n) − P. On a 30-year mortgage this figure frequently exceeds the original loan amount, which surprises many borrowers. The calculator adds the optional annual property tax and homeowner's insurance to the monthly P&I to show your full PITI payment — the real number that affects your monthly cash flow. Down payment percentage is also calculated to help borrowers understand when they can avoid Private Mortgage Insurance (PMI), which lenders typically require when the down payment is below 20%.

Examples

$400,000 Home — 20% Down, 30-Year Fixed at 7.0%
A typical first-time homebuyer scenario with a conventional 30-year mortgage.
Result: Monthly P&I of ~$2,129, total interest of ~$446,500 over 30 years.
$300,000 Home — 10% Down, 15-Year Fixed at 6.5%
A shorter loan term saves significant interest despite higher monthly payments.
Result: Monthly P&I of ~$2,349, but total interest of only ~$152,800.
$250,000 Home — 20% Down, 30-Year Fixed at 6.5%
A lower price point showing how a modest rate reduction reduces lifetime cost.
Result: Monthly P&I of ~$1,265, total interest of ~$255,300 over 30 years.

Frequently Asked Questions

What is included in a mortgage payment?
A full mortgage payment typically includes four components, abbreviated as PITI: Principal (reducing the loan balance), Interest (the cost of borrowing), Property Taxes (usually escrowed monthly by the lender), and Homeowners Insurance. Some loans also require Private Mortgage Insurance (PMI) if the down payment is below 20%. This calculator includes all four components when tax and insurance values are entered.
Does a higher down payment always make sense?
A larger down payment reduces your loan amount, lowers your monthly payment, and typically eliminates the need for PMI once you cross 20% equity. However, putting more cash into home equity reduces liquidity — that money is not easily accessible in an emergency. The right down payment depends on your cash reserves, other high-interest debts, and the opportunity cost of the capital versus your investment returns.
What is the difference between 15-year and 30-year mortgages?
A 15-year mortgage has significantly higher monthly payments but you pay far less total interest and build equity at twice the pace. A 30-year mortgage has lower monthly payments, making it more affordable month-to-month, but the total interest paid is often more than the original loan amount. Lenders also typically offer slightly lower interest rates on 15-year loans, widening the long-term savings gap.
How does interest rate affect my payment?
Even a 0.5% difference in rate produces a substantial change in both monthly payment and total interest on a large loan. On a $320,000 loan over 30 years, the difference between 6.5% and 7.0% is approximately $105 per month and over $37,000 in total interest. On a $500,000 loan, that same half-point gap exceeds $58,000 in lifetime interest — underscoring why rate shopping before committing to a lender is one of the highest-value financial decisions in the homebuying process.

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