Home Price
The purchase price of the home before your down payment is applied.
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Mortgage Calculator
Mortgage Definitions
Down Payment
The amount you plan to pay upfront. A larger down payment may lower your monthly mortgage payment.
Loan Term
The length of time you’ll have to repay your mortgage, usually shown in years.
Interest Rate
The annual rate used to calculate the interest you’ll pay on your mortgage.
PMI
Private mortgage insurance may be required if your down payment is below a certain amount. It helps protect the lender.
Taxes & Insurance
An estimate of the property taxes and homeowners insurance that may be included in your monthly payment.
Property Tax
The tax charged by your local government based on the value of your home.
Home Insurance
Insurance that helps protect your home and property from covered damage or loss.
HOA Dues
Monthly or annual fees paid to a homeowners association, if the property is part of one.
Mortgage Calculator Formula
Want to see how a mortgage payment is calculated? Here’s the basic formula used to estimate the monthly principal and interest payment:
M = P × [ r(1 + r)n / ((1 + r)n − 1) ]
M = Monthly mortgage payment
This is the estimated monthly payment for principal and interest.
P = Principal loan amount
This is the amount you borrow after your down payment.
r = Monthly interest rate
Mortgage rates are usually shown as an annual rate. To calculate the monthly rate, divide the annual rate by 12.
For example, a 5% interest rate would be 0.05 ÷ 12 = 0.004167.
n = Number of payments
This is the total number of monthly payments over the life of the loan. Multiply the number of years by 12.
For example, a 30-year mortgage would have 360 payments.
This formula gives you an estimate of principal and interest only. Your actual monthly payment may also include property taxes, homeowners insurance, PMI, and HOA dues.
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Disclosures
Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.