Mortgage — faq. This page shows the formula, a worked example and the assumptions behind the result.

How is mortgage calculated?

The formula, a worked example and the assumptions are shown on this page. Results are estimates for planning, not financial, medical or legal advice.

Is this mortgage calculator free to use?

Yes. It runs entirely in your browser, needs no account and stores nothing on a server.

Mortgage Calculator

Q: How this is calculated

Mortgage — how this is calculated. This page shows the formula, a worked example and the assumptions behind the result.

Estimate your monthly payment, total interest, and full loan payoff.

Loan amount ($)

Interest rate (% APR)

Loan term (years)

Down payment ($)

Estimated monthly payment (principal & interest)

Loan principal$0

Total interest paid$0

Total cost of loan$0

Payoff date (from today)–

How this is calculated

This uses the standard fixed-rate amortization formula: M = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the principal (loan amount minus down payment), r is the monthly interest rate, and n is the number of monthly payments. It covers principal and interest only — property tax, homeowners insurance, PMI, and HOA fees aren't included, so your actual monthly bill will typically be higher.

Worked example

A $300,000 home with a $60,000 down payment gives a $240,000 loan. At 6% annual interest over 30 years, the monthly principal and interest payment is about $1,439, and the total interest paid over the life of the loan is about $278,000. At the same rate over 15 years the payment is about $2,025 but total interest falls to roughly $124,000.

FAQ

Does this include taxes and insurance?: No — this is principal and interest only. Lenders often quote a combined "PITI" figure that adds property tax, insurance, and sometimes PMI.
What's a good interest rate?: Rates move with the market and your credit profile, so there's no fixed "good" number — compare offers from multiple lenders on the same day for an apples-to-apples read.
How does a bigger down payment change things?: It lowers your principal directly, which reduces both the monthly payment and the total interest paid over the life of the loan.