Mortgage calculator

For a standard fixed-rate amortizing mortgage: M = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1], where P is the loan amount (price minus down payment), r is the monthly interest rate (APR ÷ 12), and n is the total number of monthly payments (years × 12). Each month, the bank charges interest on the current balance, and whatever's left of your fixed payment goes toward principal. Early on, most of your payment is interest; near the end, it's mostly principal — that's why you build equity slowly at first.

No — the big number at the top is just principal & interest (P&I). If you enter a property tax rate, homeowners insurance, or HOA dues (under "+ Tax · Insurance · HOA"), the calculator shows a separate "Full monthly" figure that adds those in. Lenders often refer to this as PITI (Principal, Interest, Taxes, Insurance). HOA isn't part of PITI but matters for actual cashflow, so it's included in the full monthly total.

The interest rate is what determines your monthly P&I — that's the number this calculator uses. APR (Annual Percentage Rate) is broader: it bakes in lender fees, points, mortgage insurance, and other loan costs to give an "all-in" annualized cost expressed as a percentage. APR is always equal to or higher than the note rate. For comparing loan offers, APR is more honest; for computing your actual monthly payment, the note rate is what you want. This calculator labels its rate input "APR" loosely as the note rate, which is the convention most online tools use.

Discount points are pre-paid interest: typically 1 point = 1% of the loan amount, in exchange for roughly a 0.25% lower rate. To decide, compute the breakeven: divide the cost of the points by the monthly savings. If you'll keep the loan longer than that breakeven (e.g. 5–7 years for a typical 1-point buydown), points come out ahead. Shorter than that — or if you might refinance — and they don't. Run the numbers here: enter your scenario with and without the points-adjusted rate, compare the totals, and divide.

If your down payment is less than 20% on a conventional loan, lenders typically require PMI: an extra ~0.3%–1.5% of the loan amount per year. This calculator doesn't model PMI directly, but you can approximate it by adding the annual PMI cost to the "Homeowners insurance" field — it'll show up in the full monthly total the same way. PMI typically drops off automatically once your loan-to-value ratio reaches 78%, or you can request removal at 80%.

A 15-year loan has a higher monthly payment but dramatically less total interest — often less than half. For example, on a $320,000 loan: 30 years at 6.5% costs about $408k in interest; 15 years at 6% costs about $166k — a $240k difference. The flip side: the higher monthly payment ties up cashflow that could otherwise go toward investing, retirement contributions, or a financial buffer. The "right" answer depends on the rate spread (15-year rates are usually 0.5–0.75% lower), your other goals, and your comfort with the higher payment. Compare both with the term slider.

Not directly — it models a single fixed-rate loan held to term. To estimate the effect of a refinance, run two scenarios (current rate and target rate) and compare the totals. To approximate extra principal payments, you can shorten the loan term: for instance, paying enough extra each month to retire a 30-year loan in 22 years saves the difference in interest. A dedicated extra-payment input is on the roadmap.