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Mortgage Calculator

Last updated: February 28, 2026
Reviewed by: LumoCalculator Team

Calculate your monthly mortgage payment, total interest, and amortization schedule. Our free calculator includes extra payment analysis, compares loan terms, and helps you understand the true cost of homeownership.

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Editorial & Review Information

Reviewed on: 2026-02-28

Published on: 2025-09-25

Author: LumoCalculator Editorial Team

What we checked: We re-checked the fixed-rate amortization formula, PITI breakdown logic, and the 15-vs-30 plus extra-payment examples against the listed public references, then re-validated all source links on 2026-02-28.

Purpose and scope: This calculator helps you compare monthly affordability and lifetime borrowing cost under fixed-rate assumptions. It is not a live lender quote, underwriting decision, or legal/financial advice.

How to use this review: Use the outputs for budgeting and scenario comparison, then verify final rate, fees, escrow, and eligibility terms in your lender's official Loan Estimate.

Financial Disclaimer

Results are estimates based on your inputs. Actual mortgage pricing and approvals vary by credit profile, DTI, reserves, lender overlays, fees, escrow setup, and local property-tax/insurance conditions.

Use Scenarios

Home-price planning

Test loan amount and rate combinations to estimate monthly payment before starting lender pre-approval.

Term comparison

Compare 15-year vs 30-year tradeoffs between monthly cash flow, total interest, and payoff speed.

Extra-payment strategy

Evaluate whether optional monthly prepayments materially reduce lifetime interest and loan duration.

Formula Explanation

Monthly principal and interest

M = P x [r x (1 + r)^n] / [(1 + r)^n - 1]

  • M: monthly principal-and-interest payment
  • P: original loan principal
  • r: monthly interest rate (annual rate / 12)
  • n: total number of monthly payments

Total monthly housing payment (PITI+)

Total = P&I + Tax/12 + Insurance/12 + PMI + HOA

Escrowed taxes and insurance are modeled as monthly averages. Lender escrow methods can differ at closing and renewal periods.

Extra-payment effect

Extra monthly principal reduces outstanding balance earlier, which lowers future interest accrual and shortens payoff duration.

Boundary Conditions

Inputs assume fixed-rate amortizing loans; interest-only, balloon, and negative-amortization products are outside this model.
Property tax and insurance are simplified to annual averages and may differ from lender escrow collection schedules.
PMI is treated as a direct monthly input and does not auto-cancel by LTV milestones in this estimate.
Closing costs, discount points, lender credits, and temporary rate buydowns are excluded unless you model them separately.
APR disclosures, qualification decisions, and program eligibility (FHA/VA/USDA/jumbo) require lender-specific underwriting.
Use results for planning only; final decisions should rely on official loan estimates and licensed professional guidance.

Illustrative Mortgage Rate Scenarios (Assumption set reviewed: 2026-02-26)

6.75%
30-Year Fixed
6.00%
15-Year Fixed
5.75%
5/1 ARM
6.50%
FHA 30-Year
6.25%
VA 30-Year

These values are planning assumptions for scenario comparison, not live lender quotes. For market context, see Freddie Mac Primary Mortgage Market Survey.

15-Year vs 30-Year Mortgage Comparison

See how loan term affects your monthly payment and total interest on a $320,000 loan:

TermRateMonthly P&ITotal InterestTotal Paid
30 Years6.75%$2,076$427,360$747,360
15 Years6.00%$2,699$165,820$485,820
Difference-0.75%+$623-$261,540-$261,540

Key Insight: Choosing a 15-year mortgage saves $261,540 in interest over the life of the loan, but requires $623 more per month. Consider your cash flow and long-term goals when deciding.

Extra Payment Impact Calculator

See how extra monthly payments can save you money and time on a $320,000 loan at 6.75% for 30 years:

Extra PaymentNew Payoff TimeTime SavedInterest Saved
$0 (standard)30 years--
+$100/month25 years, 2 months4 years, 10 months$68,420
+$200/month21 years, 8 months8 years, 4 months$116,840
+$500/month15 years, 11 months14 years, 1 month$196,450

How Much House Can You Afford?

Use the 28/36 rule: housing costs <= 28% of gross income, total debt <= 36% of gross income.

Annual IncomeMonthly Limit (28%)Est. Home PriceDown Payment (20%)
$75,000$1,750$260,000 - $280,000$52,000 - $56,000
$100,000$2,333$350,000 - $380,000$70,000 - $76,000
$150,000$3,500$520,000 - $560,000$104,000 - $112,000
$200,000$4,667$700,000 - $750,000$140,000 - $150,000

Remember: "Monthly limit" includes PITI (Principal, Interest, Taxes, Insurance). The actual affordable price depends on your down payment, interest rate, property taxes, and insurance costs in your area.

Example Cases

Case 1: First-Time Homebuyer with 10% Down

Scenario

  • Home Price: $350,000
  • Down Payment: $35,000 (10%)
  • Loan Amount: $315,000
  • Rate: 6.75% (30-year fixed)
  • Credit Score: 720

Monthly Costs

  • Principal & Interest:$2,043
  • Property Tax:$292
  • Homeowner's Insurance:$125
  • PMI:$197
  • Total PITI:$2,657
PMI Note: PMI ($197/month) will be removed once 20% equity is reached (~7 years). Total PMI cost: ~$16,500.

Case 2: Move-Up Buyer with 20% Down

Scenario

  • Home Price: $550,000
  • Down Payment: $110,000 (20%)
  • Loan Amount: $440,000
  • Rate: 6.50% (30-year fixed)
  • Credit Score: 780

Monthly Costs

  • Principal & Interest:$2,781
  • Property Tax:$458
  • Homeowner's Insurance:$175
  • PMI:$0
  • Total PITI:$3,414
Extra Payment Strategy: Adding $300/month cuts payoff to 22.5 years and saves $142,000 in interest.

Case 3: VA Loan (Veteran)

Scenario

  • Home Price: $400,000
  • Down Payment: $0 (0%)
  • Loan Amount: $400,000
  • Rate: 6.25% (VA 30-year)
  • VA Funding Fee: $8,600 (financed)

Monthly Costs

  • Principal & Interest:$2,515
  • Property Tax:$333
  • Homeowner's Insurance:$150
  • PMI:$0 (No PMI for VA)
  • Total PITI:$2,998
VA Loan Benefits: No down payment required, no PMI ever, competitive rates. Funding fee can be waived for service-related disability.

Sources & References

Source note: these links support benchmark-rate context, program guidance, and consumer-risk education used in this page. For binding pricing and eligibility, rely on your lender's official loan disclosures.

Frequently Asked Questions

What is the difference between P&I and total monthly housing cost?
P&I is principal and interest only. Total monthly housing cost usually means PITI plus HOA when applicable. P&I: loan payment only PITI+: P&I + property tax + homeowners insurance + PMI + HOA When budgeting, compare your income against the full monthly total, not just P&I.
How should I compare a 15-year mortgage and a 30-year mortgage?
Use the same loan amount and compare two outputs: monthly payment and total interest. - 15-year: higher monthly payment, usually much lower total interest - 30-year: lower required payment, usually much higher lifetime interest Choose based on cash-flow stability, emergency reserves, and how long you expect to keep the home.
Are extra monthly payments always the best use of cash?
Not always. Extra principal is often attractive when your mortgage rate is high and you already covered higher-priority items. Check these first: 1) High-interest debt paid down 2) Emergency fund in place 3) Retirement match captured Then compare guaranteed mortgage-interest savings versus expected long-term investment return and your risk tolerance.
When does PMI apply and when can it be removed?
PMI commonly applies to many conventional loans when down payment is below 20%. Removal timing depends on loan type, servicer policy, and current loan-to-value conditions. This calculator treats PMI as a direct input and does not auto-remove it. For exact removal rules, check your loan documents and servicer guidance.
Are the rate numbers on this page live market quotes?
No. The rate cards here are planning assumptions for scenario comparison, not live lender offers. For current market context, review Freddie Mac PMMS and lender-specific quotes. Final pricing depends on credit, DTI, down payment, property type, lock period, and points or credits.
What costs are not fully captured in this estimator?
The model does not automatically include closing costs, discount points, lender credits, temporary buydowns, maintenance, utilities, or tax-law effects. Use this page for baseline payment planning, then validate with an official Loan Estimate from your lender.
Can I use this for ARM, interest-only, or balloon mortgages?
This tool is designed around fixed-rate amortizing assumptions. It is not a full ARM reset simulator and does not model interest-only or balloon structures by default. If your product is non-standard, use this calculator only as a rough baseline and verify with product-specific disclosures.
How can I prepare before talking to lenders?
Prepare four items first: credit profile, down-payment plan, debt-to-income estimate, and target monthly budget including tax and insurance. Then run multiple scenarios here to set a realistic range before requesting pre-approval.