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Mortgage Calculator

Calculate your monthly mortgage payment easily.

Total home price minus down payment
Current mortgage rates: 6.5% - 8.5%
Years
Choose from presets or enter custom term
Optional: Usually 0.5-1.5% of property value
Optional: Usually 0.25-0.5% of property value
Optional: Only if applicable

Results

Enter your mortgage details and click "Calculate Payment" to see your results here.

Quick Tips
  • Lower rates early: Lock in rate as early as possible
  • Larger down payment: Reduces loan amount and interest
  • Shorter term: 15-year mortgage saves more interest
  • Extra payments: Pay extra monthly to reduce principal
  • Compare offers: Shop around with multiple lenders
Impact Scenarios
Related Tools
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Mortgage Resources:

Important Disclaimer
This calculator provides estimates for educational purposes. Actual mortgage payments may vary based on additional fees, taxes, and lender-specific terms. Always consult with a financial advisor or lender for accurate information.

What is a Mortgage?

A mortgage is a loan specifically used to purchase real estate. It's a legal agreement between you (the borrower) and a lender (usually a bank), where the property itself serves as collateral for the loan. You repay the loan in monthly installments over a set period, typically 15 to 30 years.

Unlike other loans, a mortgage repayment is made up of two main parts: Principal (the money you borrowed) and Interest (the cost of borrowing). Most monthly payments also include property taxes and home insurance, collected by the lender in an escrow account.

Types of Mortgages

Fixed-Rate Mortgage

Most popular choice. Interest rate remains the same for the entire loan term.

  • Predictable monthly principal & interest payments
  • Protection against rising interest rates
  • Available in 10, 15, 20, and 30-year terms
  • Best for long-term homeowners
Adjustable-Rate Mortgage (ARM)

Lower initial rate. Rate can change after an initial fixed period (e.g., 5 or 7 years).

  • Lower monthly payments for the first few years
  • Rate adjusts annually based on market index
  • Risk of payments increasing in the future
  • Best if you plan to move or refinance soon

Mortgage Payment Components (PITI)

Component Description Impact
Principal The part of your payment that reduces your loan balance. Builds Equity
Interest The fee charged by the lender for borrowing the money. Cost of Loan
Property Taxes Tax paid to local government based on property value. Annual Cost
Home Insurance Protects your home against damage and theft. Protection
PMI Private Mortgage Insurance (required if down payment < 20%). Extra Cost

Tax Benefits of Homeownership

Owning a home can provide significant tax advantages if you choose to itemize your deductions:

Mortgage Interest Deduction
  • Deduct interest on first $750,000 of mortgage debt ($375,000 if married filing separately).
  • Applies to both primary and secondary homes.
Property Tax Deduction
  • Deduct up to $10,000 in combined state and local taxes (SALT), including property tax.
  • Available for multiple properties.
Pro Tip: Compare your total itemized deductions (Mortgage Interest + Property Tax + Charitable) against the Standard Deduction to see which saves you more tax.

The Power of Extra Payments

Making extra payments toward your principal can save you thousands in interest and shorten your loan term significantly.

How it Works:
  • Pay slightly more each month (e.g., round up).
  • Make one extra full payment per year.
  • Put tax refunds or bonuses toward the principal.
Example Impact:

On a $300,000 loan at 6% for 30 years, paying just $100 extra per month saves over $46,000 in interest and pays off the loan 5 years early!

Frequently Asked Questions

20% is considered the "gold standard" because it avoids Private Mortgage Insurance (PMI) and secures better interest rates. However, many lenders accept as little as 3-5% (Conventional) or 3.5% (FHA) for qualified buyers.

A common rule of thumb is the 28/36 rule: Your housing expenses (PITI) should not exceed 28% of your gross monthly income, and your total debt payments (including housing) should not exceed 36%.

30-Year: Lower monthly payments, but you pay significantly more interest over the life of the loan. 15-Year: Higher monthly payments, but you build equity faster and save essentially half the interest cost.

Closing costs are fees paid at the final signing of your loan documents. They typically range from 2% to 5% of the loan amount and cover appraisal, title insurance, origination fees, and prepaid taxes/insurance.

Yes! You can refinance to get a lower interest rate, shorten your term, or tap into your home's equity (Cash-Out Refinance). However, refinancing involves new closing costs, so calculate your break-even point first.

An amortization schedule is a detailed table showing the breakdown of every payment over the life of the loan. It shows how much goes to principal versus interest, and how your loan balance decreases over time.
Important Disclaimer

This calculator provides estimates for educational purposes only. Actual payments will vary based on your lender, credit score, down payment, and closing costs. Tax laws are subject to change; consult a tax professional for advice on deductibility. Multicalc.in does not offer loans or financial advice.