Finance & Business
Mortgage Calculator
Calculate your monthly mortgage payments and view your complete amortization schedule.
Enter values to calculate your mortgage payments
Related to Mortgage Calculator
The mortgage calculator uses the standard amortization formula to determine your monthly mortgage payments and create a detailed payment schedule. The calculation takes into account four primary factors: the home price, down payment, loan term, and interest rate.
Monthly Payment Formula
The monthly payment (M) is calculated using the following formula: M = P * (r * (1 + r)^n) / ((1 + r)^n - 1) where: P = Principal loan amount r = Monthly interest rate (annual rate divided by 12) n = Total number of payments (years * 12)
The calculator also generates an amortization schedule showing how each payment is split between principal and interest, and how the loan balance decreases over time. The interactive graph visualizes your loan balance reduction throughout the term of the mortgage, helping you understand the amortization process better.
The calculator provides comprehensive results to help you understand the full cost of your mortgage and plan your finances accordingly. The results include your monthly payment, total payment over the loan term, and total interest paid.
Key Results Explained
Monthly Payment: The fixed amount you'll pay each month, including both principal and interest.
Total Payment: The total amount you'll pay over the entire loan term, including the principal and all interest.
Total Interest: The total amount of interest you'll pay over the life of the loan.
The amortization schedule provides a month-by-month breakdown of your payments, showing how much goes toward principal and interest each month. The graph visualizes how your loan balance decreases over time, demonstrating the amortization process and helping you understand the long-term impact of your mortgage.
1. How does the down payment affect my mortgage?
A larger down payment reduces your loan amount, which leads to lower monthly payments and less total interest paid over the life of the loan. Additionally, a down payment of 20% or more typically helps you avoid private mortgage insurance (PMI).
2. Should I choose a longer or shorter loan term?
A longer loan term (e.g., 30 years) results in lower monthly payments but higher total interest paid. A shorter term (e.g., 15 years) means higher monthly payments but significant savings on total interest and faster equity building.
3. How do interest rates impact my mortgage?
Even a small change in interest rate can significantly affect your monthly payment and total interest paid. Higher rates increase both monthly payments and total cost, while lower rates reduce them. It's important to shop around for the best rate.
4. What's not included in these calculations?
The calculator shows basic mortgage payments (principal and interest) but doesn't include other potential costs like property taxes, home insurance, HOA fees, or private mortgage insurance (PMI). These additional costs should be considered when budgeting for a home purchase.
5. What is the scientific source for this calculator?
This calculator uses the standard amortization formula widely accepted in financial mathematics and banking. The formula is derived from the time value of money principles established in financial theory and is used by financial institutions worldwide. The calculations follow the compound interest formulas documented in financial textbooks and banking standards, particularly the works of Richard A. Brealey and Stewart C. Myers in "Principles of Corporate Finance." The amortization schedule follows the standardized methodology used by mortgage lenders and financial institutions, ensuring accurate and reliable results.