Finance

Professional Mortgage Payment Calculator (1970)

Plan a home loan with confidence.

Home price$350,000.00

Down payment$70,000.00 (20%)

Interest rate (%)6.80%

Loan term (years)30 yr

Result

$1,825.39 / mo

Principal: $280,000.00

Total of payments

$657,140.59

Total interest

$377,140.59

Interest vs Principal

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Quick summary

A mortgage calculator estimates your monthly home-loan payment based on the loan amount, interest rate, and term. It uses the standard fixed-rate amortization formula used by U.S. lenders.

How to calculate mortgage manually

Convert the annual interest rate to a monthly rate: divide APR by 12.
Convert the loan term to months: multiply years by 12.
Apply the amortization formula M = P · i / (1 − (1 + i)^−n).
Add monthly property tax, homeowners insurance, and PMI to get full PITI.

Estimate your monthly mortgage payment based on home price, down payment, interest rate, and loan term.

How it works

Principal = price − down payment. Monthly payment uses the same amortization formula as a fixed-rate loan.

Example

A $350K home with 20% down at 6.8% over 30 years yields ≈ $1,825 / month.

Expert guide

Mortgage planning in the United States: a complete primer

Whether you're a first-time homebuyer in Phoenix or refinancing a 30-year fixed in Boston, understanding how a U.S. mortgage actually works can save you tens of thousands of dollars over the life of the loan.

Understanding PITI: the real monthly cost of homeownership

Most online calculators only show principal and interest, but your true monthly housing payment is PITI: Principal, Interest, Taxes, and Insurance. In the U.S., property taxes vary widely — from under 0.5% in Hawaii to over 2.0% in New Jersey — and homeowners insurance averages around $1,500 to $2,500 per year depending on state and coverage. If your down payment is less than 20%, lenders also require Private Mortgage Insurance (PMI), which typically adds 0.3% to 1.5% of the loan amount annually. Add HOA dues if your property has them, and the gap between a P&I quote and your real monthly outflow can easily be $400 to $800.

How amortization actually works

A fixed-rate mortgage uses an amortization schedule, meaning your monthly payment stays constant but the split between interest and principal shifts over time. In the early years of a 30-year loan, the vast majority of each payment goes to interest. Around year 12 to 15, the balance flips and you start building equity faster. This is why making one extra payment per year — applied directly to principal — can shave four to six years off a 30-year loan and save tens of thousands in interest.

Down payment impact and loan term tradeoffs

A larger down payment lowers your principal, eliminates PMI at 20%, and unlocks better interest rates. Choosing a 15-year fixed instead of a 30-year fixed typically gets you a rate that's 0.5% to 0.75% lower and cuts lifetime interest by more than half — though monthly payments are roughly 40% to 50% higher. Use this calculator to model both terms side by side before committing.

Frequently asked questions

What is considered a good mortgage rate in 2025?

A 'good' rate depends on the broader market, but a competitive 30-year fixed is generally within 0.25% of the weekly average published by Freddie Mac's Primary Mortgage Market Survey. Borrowers with credit scores above 740, a debt-to-income ratio under 36%, and at least 20% down typically qualify for the lowest available rates.

How much house can I afford on my income?

A common rule of thumb is the 28/36 rule: spend no more than 28% of your gross monthly income on housing (PITI) and no more than 36% on total debt payments. On a $90,000 salary, that's roughly $2,100 per month for housing — but always model your actual budget, including childcare, retirement contributions, and emergency savings.

Should I pay points to lower my mortgage rate?

Each discount point costs 1% of the loan amount and typically lowers your rate by about 0.25%. Buying points pays off only if you keep the loan long enough to recoup the upfront cost — usually five to seven years. If you might refinance or sell sooner, skip the points.

Insight

30-year fixed mortgage benchmarks

Freddie Mac PMMS weekly survey averages and historical reference points.

Period	Average rate	Note
2020 historic low	2.65 %	Jan 2021 PMMS
2024 average	6.72 %	Full-year mean
2025 YTD	6.85 %	Indicative
Last 30-yr average	≈ 7.7 %	1995–2025
Affordability rule	PITI ≤ 28 % gross	28/36 rule

Verified by Financial Analyst

Editorial disclaimer

For informational purposes only. Consult a certified financial professional before making financial decisions.

How we calculate your mortgage payment

M = P · i / (1 − (1 + i)^−n)

P is the loan principal (home price minus down payment), i is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments (years × 12). This is the standard fixed-rate amortization formula used by U.S. lenders. Property taxes, insurance, and PMI are not included.