Money · home · updated July 2026
Mortgage Calculator
By the Dailycaltor team · formula-verified · last updated July 2026
Your monthly payment, total interest, and everything lenders won't explain in plain English.
Details
Quick answer
A mortgage payment is set by three numbers: how much you borrow, the interest rate, and the term. At mid-2026 rates around 6.5%, every $100,000 borrowed costs about $632 per month on a 30-year loan. So a $300,000 loan runs ~$1,896/month in principal and interest, before property tax and insurance.
The formula, and what each variable means
M = P × r(1+r)n ÷ ((1+r)n − 1)
- P — principal: the amount you actually borrow (price minus down payment). Financed closing costs quietly raise P.
- r — monthly rate: the annual rate divided by 12. A 6.5% quote means r = 0.0054167. Small differences here compound into huge dollar differences.
- n — number of payments: years × 12. A 30-year loan is 360 payments; a 15-year is 180.
- M — the payment: fixed for the life of a fixed-rate loan; only the interest/principal split inside it changes.
Step-by-step: $300,000 at 6.5% for 30 years
- Step 1 — monthly rate: 6.5% ÷ 12 = 0.0054167.
- Step 2 — payments: 30 × 12 = 360.
- Step 3 — growth factor: (1.0054167)360 ≈ 6.992.
- Step 4 — payment: 300,000 × 0.0054167 × 6.992 ÷ 5.992 ≈ $1,896.
- Step 5 — lifetime cost: 360 × $1,896 = $682,633, of which $382,633 is interest — more than the house itself.
What rates and terms really do to the payment
The same $300,000 loan, computed with the exact formula:
| Scenario | Monthly (P&I) | Total interest |
|---|---|---|
| 30-yr @ 5.0% | $1,610 | $279,767 |
| 30-yr @ 6.0% | $1,799 | $347,515 |
| 30-yr @ 6.5% | $1,896 | $382,633 |
| 30-yr @ 7.0% | $1,996 | $418,527 |
| 15-yr @ 6.5% | $2,613 | $170,398 |
Two lessons hide in that table. A 1-point rate change (6% → 7%) moves the payment ~$197/month but total interest by ~$71,000. And the 15-year term costs 38% more per month yet saves $212,235 in interest versus the 30-year at the same rate.
The full monthly cost (PITI)
Lenders and budgets use PITI: Principal + Interest (this calculator) + Taxes + Insurance. Property tax runs roughly 0.5%–2.5% of home value per year depending on state; homeowner's insurance a further $1,500–$3,000+ for many homes; and PMI (0.3%–1.5% of the loan yearly) applies below 20% down until you reach 20% equity. A “$1,896 mortgage” is often a $2,400–$2,700 real monthly cost.
Common mistakes
- Shopping by monthly payment only. Sellers of money — like sellers of cars — stretch terms to shrink payments while total cost balloons.
- Ignoring PITI. Qualifying on P&I and being surprised by taxes and insurance is the classic first-year budget shock.
- Comparing rate to rate instead of APR to APR. Fees and points hide in the gap.
- Draining savings to hit 20% down. Avoiding PMI matters less than keeping an emergency fund; PMI ends, emergencies don't.
- Assuming you'll refinance later. Maybe — but qualify and budget on today's numbers.
Where this tool helps — and its limits
Benefits: instant payment and lifetime-interest math at any price, rate and term; perfect for comparing offers, testing down payments and understanding 15 vs 30-year trade-offs before talking to lenders.
Limitations: it computes principal and interest only — taxes, insurance, PMI and HOA fees vary by property and are not included; it models fixed-rate loans, not adjustable-rate (ARM) resets; and it isn't a qualification decision, which also weighs credit, income and debt-to-income ratios.
Industry standards worth knowing
- 28/36 rule: housing costs ≤ 28% of gross monthly income; all debts ≤ 36% — try the affordability calculator.
- 43% DTI: the common ceiling for “qualified mortgages” under US consumer rules.
- 20% down: the PMI threshold on conventional loans; FHA programs allow 3.5% with mortgage insurance premiums instead.
- Escrow: most servicers collect tax and insurance monthly and pay the bills for you — expect the escrow line on your statement.
Authoritative sources: the US Consumer Financial Protection Bureau (consumerfinance.gov) explains loan estimates, PMI and borrower rights; Freddie Mac publishes weekly average rates; HUD.gov covers FHA rules. This page is education, not lending advice — verify terms with your lender. Last updated: July 2026.
Mortgage questions, answered
How is a mortgage payment calculated?
Lenders use the amortization formula: M = P x r(1+r)^n / ((1+r)^n - 1), where P is the loan amount, r the monthly rate and n the number of months. The calculator above applies it instantly.
How much is the mortgage on a $300,000 house?
With 20% down ($240,000 loan) at 6.5% over 30 years, principal and interest is about $1,517/month. Financing the full $300,000 is $1,896/month. Taxes and insurance come on top.
How much house can I afford?
Lenders commonly cap housing costs at 28% of gross monthly income and total debts at 36%. Our house affordability calculator applies the rule to your numbers.
What is included in a monthly mortgage payment?
Four parts, often called PITI: Principal, Interest, Taxes (property) and Insurance (homeowner's, plus PMI if your down payment was under 20%).
Is a 15-year or 30-year mortgage better?
A 15-year roughly halves total interest but raises the payment about 38% at the same rate. On $300,000 at 6.5%: $2,613/month and $170,398 interest (15-yr) versus $1,896/month and $382,633 (30-yr).
How much difference does 1% in rate make?
On a $300,000 30-year loan, moving from 6% to 7% raises the payment from $1,799 to $1,996 - about $197/month and roughly $71,000 more interest over the term.
What is PMI and when does it end?
Private mortgage insurance protects the lender when you put down under 20%. It typically costs 0.3%-1.5% of the loan per year and can be removed once you reach 20% equity (it must end automatically at 22%).
What credit score do I need for a mortgage?
Conventional loans generally want 620+; the best rates typically go to 740+. FHA programs accept lower scores with larger insurance costs.
What is amortization?
The schedule that splits each fixed payment between interest and principal. Early on, most of the payment is interest; the balance shifts toward principal over time.
Do extra payments really help?
Yes - extra amounts go entirely to principal. Adding $200/month to a $300,000 loan at 6.5% pays it off about 7 years early and saves roughly $100,000 in interest.
What are mortgage points?
Prepaid interest: one point costs 1% of the loan and typically cuts the rate by about 0.25%. Worth it mainly if you keep the loan well past the break-even period.
What is APR vs interest rate?
The rate sets your payment; APR adds fees and points to show the true yearly cost - the better number for comparing offers.
How much are closing costs?
Typically 2%-5% of the purchase price, on top of the down payment.
Can I get a mortgage with student loans?
Yes - lenders count the monthly payments inside your debt-to-income ratio, which reduces the size of mortgage you qualify for.
What happens if I miss a mortgage payment?
Late fees start after the grace period, credit damage after 30 days, and foreclosure risk grows after 90-120 days. Contact the servicer early - options usually exist.
Does this calculator include property tax and insurance?
No - it shows principal and interest, because tax and insurance vary by location. Budget roughly 0.5%-2.5% of home value per year for property tax plus homeowner's insurance.
Ready to run your real numbers? Scroll up, enter your loan, and compare a 15 vs 30-year side by side — then check what you can actually afford.