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Instantly estimate your monthly payment, total interest, total cost, and full amortization schedule. Adjust sliders for real-time results. Free, no sign-up required.
Every mortgage payment is split between principal (reducing your loan balance) and interest (the lender's fee). In the early years of a 30-year mortgage, the vast majority goes toward interest. As the balance decreases, more shifts to principal — this is amortization.
M = P x [r(1 + r)^n] / [(1 + r)^n - 1]
At 6.5 percent APR for 30 years, P and I is approximately 1896 per month. Adding 1.2 percent property tax and 100 per month insurance brings total PITI to roughly 2296 per month.
A full mortgage payment has four components called PITI: Principal (reduces loan balance), Interest (lender's fee), Taxes (property taxes escrowed monthly), and Insurance (homeowner's insurance). If down payment is below 20 percent, PMI is also added.
Strategies: larger down payment, better credit score (760 plus for best rates), shop multiple lenders (rates vary 0.5 to 1 percent), longer term, buy mortgage points, or refinance when rates drop.
Using the amortization formula: M = P x [r(1+r)^n] / [(1+r)^n - 1], where P is the loan principal, r is the monthly rate (APR / 12), and n is total payments (years x 12). The pie chart above shows how your total cost splits between principal and interest.
On a 320000 loan at 6.5 percent APR: 30-year costs 2023 per month with 408000 total interest. 15-year costs 2791 per month with 182000 total interest - saving 226000 but requiring 768 more per month.
Six main factors: home price, down payment, interest rate (1 percent difference on 400K equals about 240 per month change), loan term, property taxes (0.3 to 2.5 percent by state), and homeowner's insurance (800 to 2000 per year).
Find your max home price based on income and DTI ratio.
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Educational purposes only. Not financial advice. Consult a licensed mortgage professional for personalized guidance. Formula sources: CFPB.
