How this mortgage calculator works
The calculator first subtracts your down payment from the home price to find the mortgage principal. It then applies the standard fixed-payment amortization formula using the annual interest rate, loan term and monthly payment periods. Optional property tax, home insurance, HOA or condo fees and mortgage insurance are added separately so you can see the difference between the loan payment and the broader estimated monthly housing cost.
M = P × r(1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)
In this formula, M is the scheduled monthly principal-and-interest payment, P is the initial loan principal, r is the monthly interest rate and n is the number of monthly payments. When the entered rate is 0%, the calculator divides principal evenly across the selected term.
Important: mortgage conventions vary by country and lender. This page uses a standard monthly-rate amortization model. A lender using a different compounding convention or payment frequency can produce a somewhat different payment. Choose “Canada” to use semi-annual compounding, as Canadian fixed-rate mortgages do.
How extra mortgage payments can change payoff
An extra payment applied directly to principal reduces the balance sooner. Because future interest is calculated on a smaller balance, the loan may finish earlier and total interest can fall.
This calculator applies the entered extra amount every month after the scheduled principal-and-interest payment. Confirm with your lender that extra principal payments are allowed and whether prepayment limits or charges apply.
Example: $400,000 loan at 5%
Buying a $500,000 home with 20% down means borrowing $400,000. At a 5% rate with US monthly compounding, the term you pick changes both the payment and the total interest dramatically (principal and interest only, rounded):
| Term | Monthly P&I | Total interest |
|---|
| 15 years | ≈ $3,163 | ≈ $169,400 |
| 25 years | ≈ $2,338 | ≈ $301,500 |
| 30 years | ≈ $2,147 | ≈ $373,000 |
Adding an extra monthly payment shortens the loan further; enter one above to see the exact payoff date and interest saved.
Last updated October 2026 · Method: standard fixed-rate amortization · Estimates only, see our disclaimer.
Mortgage calculator FAQ
What is the difference between principal and interest?
Principal is the amount borrowed and still owed. Interest is the cost charged for borrowing that money. Early in a typical amortizing mortgage, a larger share of the scheduled payment often goes to interest; later, more goes to principal.
Does the calculator include property taxes and insurance?
Yes, if you enter them. Annual property tax and home insurance are divided by 12 and added to the displayed estimated monthly housing payment. They do not change the principal-and-interest amortization calculation.
Does a larger down payment reduce the mortgage payment?
Usually, yes. A larger down payment reduces the amount financed, which lowers the principal used in the monthly mortgage-payment calculation. It can also affect lender requirements and mortgage insurance, but those rules vary by location and lender.
What does the extra monthly payment do?
The extra amount is applied to principal each month in the amortization simulation. The results show the estimated earlier payoff and interest savings compared with the same loan without extra payments.
Why might my lender quote a different payment?
Differences can come from compounding conventions, payment frequency, fees, closing costs, mortgage insurance, escrow requirements, exact first-payment timing, rate rounding and local lending rules.
Is this calculator a mortgage approval or financial advice?
No. It is an educational estimation tool. A lender determines qualification, available rates, terms, fees and the actual loan payment.