Mortgage Calculator
Use your own numbers after reviewing the formula and worked example.
Quick answer
A standard fixed-rate mortgage payment is based on principal, the monthly interest rate and the number of monthly payments.
Formula or method
Keep units, percentages and time periods consistent. The formula is useful as a transparent check on the calculator result and helps explain why changing one input changes the answer.
Step-by-step
- Start with the amount borrowed after the down payment.
- Convert the annual interest rate to a monthly decimal rate.
- Convert the term in years to total monthly payments.
- Apply the fixed-payment formula and round to cents.
Worked example
For a $300,000 mortgage at 6.5% for 30 years, principal and interest are about $1,896.20 per month.
How to interpret the result
Lower rates and smaller balances generally lower the payment. A longer term lowers the scheduled payment but can increase total interest.
When the answer is used for a purchase, loan, payroll decision, construction order, school grade, health estimate or other real-world choice, verify the assumptions that matter in that context. Accurate arithmetic still depends on accurate inputs.
Common mistakes
- Using the annual rate directly instead of a monthly rate.
- Treating principal and interest as the full housing payment.
- Comparing loans by payment alone.
Frequently asked questions
Does the formula include taxes and insurance?
No. The standard amortization formula is for principal and interest.
Why is a 30-year payment lower than a 15-year payment?
The balance is spread across more scheduled payments.
What if the rate is 0%?
Principal is divided by the number of payments.