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Mortgage Calculator

Calculate monthly mortgage payments, total interest, and amortization schedule. Free mortgage calculator with extra payment options and detailed payment breakdown.

Calculate Your Payment

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See how extra payments can save you money and time

Additional Costs (Optional)

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Payment Results

$1,896.20
Principal & Interest
$2,646.20
Total Monthly Payment
(Including taxes, insurance, PMI, HOA)
$682,633
Total P&I Paid
$382,633
Total Interest

Payment Breakdown

Principal & Interest
$1,896.20
Property Tax
$500.00
Home Insurance
$100.00
PMI
$150.00
Loan Term
30 years

Understanding Mortgages

Key Mortgage Components

Principal

The original loan amount you borrow to purchase your home

Interest

The cost of borrowing money, expressed as an annual percentage rate

Term

The length of time you have to repay the loan (typically 15 or 30 years)

Payment Structure

Early Payments

More interest, less principal - most of your payment goes to interest

Later Payments

More principal, less interest - you pay down the loan balance faster

Amortization

The gradual reduction of loan balance through scheduled payments

Mortgage Types & Terms

Common Loan Terms

30-Year Mortgage
  • • Lower monthly payments
  • • Higher total interest paid
  • • More common choice
  • • Better cash flow flexibility
15-Year Mortgage
  • • Higher monthly payments
  • • Much less total interest
  • • Typically lower interest rates
  • • Faster equity building

Interest Rate Types

Fixed-Rate Mortgage

Interest rate stays the same for the entire loan term

  • • Predictable monthly payments
  • • Protection from rate increases
  • • Easier to budget and plan
Adjustable-Rate Mortgage (ARM)

Interest rate can change over time based on market conditions

  • • Often starts with lower initial rate
  • • Rate can increase or decrease
  • • Good for short-term ownership

Extra Payment Strategies

💡 Smart Strategy

Even small extra payments can save thousands in interest and years off your mortgage term.

🎯 Monthly Extra Payment

Add a fixed amount to your monthly payment

  • • Consistent and automatic
  • • Easier to budget for
  • • Steady progress toward payoff
📅 Annual Extra Payment

Make one large payment per year (like tax refund)

  • • Use windfalls effectively
  • • Significant impact per payment
  • • Flexible timing
🔄 Bi-Weekly Payments

Pay half your monthly payment every two weeks

  • • 26 payments = 13 monthly payments
  • • One extra payment per year
  • • Can save 4-6 years on 30-year loan
⚖️ Consider Alternatives

Before making extra payments, consider:

  • • High-interest debt first
  • • Emergency fund adequacy
  • • Investment opportunities

Real-World Examples

Case 1: First-Time Homebuyer

Scenario: $250,000 home, 20% down
Loan Amount: $200,000
Rate: 6.8%, 30-year fixed
Monthly Payment: $1,313
Total Interest: $273,680
Total Paid: $473,680

Impact of $100 extra monthly: Save $63,000 in interest, pay off 7.5 years early

Case 2: Move-Up Buyer

Scenario: $500,000 home, 10% down
Loan Amount: $450,000
Rate: 6.5%, 30-year fixed
Monthly Payment: $2,844
Total Interest: $573,840
Total Paid: $1,023,840

Comparing terms: 15-year loan at 6.0% = $3,797/month, saves $342,000 in interest

Frequently Asked Questions

How is a mortgage payment calculated?
Mortgage payments are calculated using a standard formula that considers the loan principal, interest rate, and loan term. The monthly payment includes both principal (paying down the loan balance) and interest (the cost of borrowing). The formula ensures equal monthly payments throughout the loan term, with early payments having more interest and later payments having more principal.
What factors affect my mortgage interest rate?
Several factors influence your mortgage rate: credit score (higher scores get better rates), down payment amount (larger down payments often mean lower rates), loan term (15-year loans typically have lower rates than 30-year), debt-to-income ratio, employment history, and overall economic conditions. Shopping around with multiple lenders can also help you find the best rate.
Are extra mortgage payments worth it?
Extra mortgage payments can save significant money in interest and reduce the loan term. However, consider your other financial priorities first: high-interest debt, emergency fund, retirement savings, and investment opportunities. If you have low-rate debt and can earn more than your mortgage rate through investments, those might be better uses of extra funds.
Should I buy a home or continue renting?
This depends on your financial situation, lifestyle, and local market conditions. Consider factors like: how long you plan to stay in the area (buying typically makes sense for 5+ years), upfront costs (down payment, closing costs), ongoing maintenance costs, tax benefits of homeownership, and opportunity cost of your down payment. Use the total monthly cost including taxes, insurance, and maintenance when comparing to rent.
What are the different types of mortgages?
Common mortgage types include: Fixed-rate mortgages (same rate for entire term), Adjustable-rate mortgages (ARM, rates change after initial period), FHA loans (government-backed, lower down payment), VA loans (for veterans), USDA loans (for rural areas), and Jumbo loans (for high-value properties). Each has different requirements, benefits, and risks depending on your situation.

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