Mortgage Calculator
Enter a home price, down payment, rate and term to see your monthly principal-and-interest payment.
How a mortgage payment is calculated
A mortgage is a long loan secured against a home. You borrow the purchase price minus your down payment, and repay it in equal monthly instalments that blend principal and interest — the same amortisation maths as any other loan, stretched over decades. Because the term is so long, the interest rate has an outsized effect: small rate differences compound into tens of thousands over 30 years.
Worked example: a $400,000 home with a $80,000 (20%) down payment leaves a $320,000 loan. At 6.5% over 30 years the monthly principal-and-interest payment is $2,022.62. Total interest over the full term comes to roughly $408,000 — more than the loan itself, which is why extra payments early on are so powerful.
Remember that P&I is only part of homeownership cost. Budget separately for property taxes, insurance, maintenance (a common rule of thumb is 1% of the home's value per year) and any HOA dues.
Frequently asked questions
What does this mortgage payment include?
It covers principal and interest (P&I) only — the core loan payment. Your real monthly housing cost will also include property taxes, homeowner's insurance and possibly HOA fees or private mortgage insurance (PMI), which many lenders bundle into an escrow payment.
How does the down payment affect the payment?
The down payment reduces the amount you borrow, which lowers both the monthly payment and the total interest. A down payment of 20% or more also usually avoids PMI, an extra monthly cost that protects the lender.
15-year or 30-year mortgage — which is better?
A 30-year term gives a lower monthly payment but much more total interest. A 15-year term has a higher payment but a lower rate typically and far less interest overall. The right choice depends on your budget and how long you plan to stay.
What is the mortgage payment formula?
M = L × r × (1+r)^n ÷ ((1+r)^n − 1), where L is the loan amount (price minus down payment), r is the monthly rate, and n is the total number of monthly payments.