Use our Mortgage Calculator to determine your monthly payment, total interest expense and payoff date for a fixed rate mortgage based on your loan amount, loan length, mortgage rate and start date. These factors are all included in our calculator so you can understand how each input impacts your payment, interest cost and mortgage pay-off date. The higher your loan amount and higher your mortgage rate, the higher your monthly payment. Additionally, the longer your loan, the lower your payment but the higher your total interest expense over the course of your mortgage. In short, the longer it takes to pay back the lender, the more interest you owe. You can use our Mortgage Calculator to understand how different rates and mortgage lengths affect both your monthly payment and interest expense.
The amortization schedule chart below the calculator shows the annual split between principal and interest payments and how your mortgage balance gets paid down over time. The chart shows how at the beginning of the mortgage, your monthly payment is comprised of mostly interest while at the end of the loan, the payment is comprised of mostly principal. You can also use the chart to determine your loan balance at any given point over the course of your mortgage. This information is helpful to understand how much equity you have in your home as well as how much interest you pay annually, which affects your mortgage tax deduction.
We encourage you to use our Mortgage Calculator to evaluate different scenarios to select the loan amount and length that best meet your needs. For example, our calculator enables you to determine the monthly payment for any mortgage size and length to understand how shorter term loans have higher payments but lower total interest expense over your loan term.
Monthly Housing Payments
- Loan Type
What Determines Your Monthly Mortgage Payment?
Your loan amount is one of the most important factors in determining your mortgage payment. Simply put, the larger your mortgage, the higher your monthly mortgage payment and the smaller your mortgage, the lower your monthly mortgage payment. Borrowers should evaluate mortgage payments for different loan amounts to determine the monthly payment they are comfortable with. In addition to your mortgage payment, borrowers should factor in other housing expenses including property tax, homeowners insurance as well as other potentially applicable expenses such as mortgage insurance and homeowners association (HOA) dues, to make sure they are getting a mortgage and home they can afford. Our mortgage calculator enables you to understand how your monthly payment changes depending on your loan amount and other factors.
The higher your mortgage rate, the higher your monthly payment seems pretty straightforward but a lot of factors go into determining your interest rate. The amount of closing costs can affect your rate as mortgages with higher closing costs generally having lower interest rates, and vice versa. For example, a "no cost" mortgage where the borrower pays no recurring closing costs has a higher mortgage rate than a mortgage with standard closing costs. Borrowers can also elect to pay discount points, which are an additional up-front fee added to your closing costs to "buy-down" or lower their mortgage rate. As we discuss below, mortgage type and length also impact your interest rate and monthly payment. Use our mortgage calculator to understand how different mortgage rates impact your loan payment and loan amortization.
Lenders offer mortgages with different lengths, which are also called terms. 10, 15, 20, 25 and 30 year mortgage terms are available to borrowers with the 30 year term being the most common. The length of your mortgage directly impacts your mortgage payment with the longer your mortgage term, the lower your payment. For example, the monthly mortgage payment on a 30 year mortgage is less than the payment on a 15 year mortgage. The monthly payments are lower on mortgages with longer terms because you pay back the loan over a longer period of time. On the other hand, the shorter your mortgage term, the lower your interest rate and less interest expense you pay over the life of the mortgage. So while the monthly payment on a mortgage with a shorter term is more than the payment on a mortgage with a longer term, you actually save a significant amount of money because you pay a lower interest rate and pay off your loan sooner, which reduces your total interest expense. The mortgage calculator above shows you how mortgage length directly impacts your monthly payment.
The mortgage program you select also affects your interest rate and monthly payment. Additionally, depending on what type of mortgage program you choose, your interest rate and payment may change over the course of your loan. If you select a fixed rate mortgage your interest rate and monthly payment stay constant over your entire loan, but you pay a higher interest rate as compared to an adjustable rate mortgage (ARM) or interest only mortgage, at least initially. With an adjustable rate mortgage, you pay a lower initial mortgage rate for up to ten years but then your interest rate an payment adjust and could potentially increase for the remainder of the loan. With an interest only mortgage you pay only interest, and no principal, at a lower interest rate for up to ten years, and then you are required to pay both interest and principal plus your mortgage rate is subject to change, which means your monthly payment could increase significantly. Borrowers should be sure to understand how their interest rate and monthly payment could potentially change over the course of their mortgage depending on the mortgage program they choose.
Your Principal and Interest Payments Change Even Though Your Mortgage Payment Does Not
Our mortgage calculator enables you to see how your principal and interest payments change over time despite your monthly mortgage payment remaining the same. This may seem confusing but your monthly payment is comprised of both principal and interest and when you add the two together that is the payment you are required to pay. The breakdown between principal and interest changes with every payment based on an amortization formula that results in the lender receiving their required interest payments and the borrower paying off the mortgage completely over the course of the loan. In the beginning of the loan, your mortgage balance is higher so you pay mostly interest. Over time your interest expense gradually decreases as you pay off more principal. Paying down principal is not directly correlated to how long you have been paying your mortgage which means even if you are halfway through your loan term more than half of your mortgage balance remains outstanding. Use our mortgage calculator to better understand how much of your loan you have paid off at any point in time.
Understand How Impounds Affect Your Mortgage Payment
Impounds are housing expenses such as property tax and homeowners insurance that you may be required to pay along with your monthly mortgage payment. Instead of paying these expenses separately to the tax assessor or insurance company you may be required to pay them when you make your monthly payment. Your impound payments go into a separate account managed by your lender from which these expenses are paid when due. So while technically impounds do not go to the lender, many borrowers consider them to be part of the mortgage payment because they are added to your payment. Although impounds do not impact your actual mortgage payment, they increase the monthly payment you are required to make to the lender. Many low down payment mortgage programs such as FHA loans require borrowers to pay impounds and you should be sure to check with your lender to understand if impounds apply to you and how they may affect your monthly payment.
More FREEandCLEAR Mortgage Resources
Compare mortgage rates and fees for leading lenders near you. Comparing proposals from multiple lenders is the best way to find the mortgage with the lowest interest rate and fees
Review, compare and understand the pros and cons for the three main types of mortgage program -- fixed rate mortgage, adjustable rate mortgage (ARM) and interest only mortgage -- to select the mortgage that is right for you
Understand how mortgage term impacts your interest rate, monthly payment and total interest expense over the life of a mortgage
Money and time-saving advice across a wide range of mortgage topics from an expert with over forty years of industry experience