Free mortgage payment calculator

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The free Insider mortgage calculator shows how much you'll pay each month based on your home price, down payment, term length, and mortgage rate. We also provide customized tips on how to save money on your mortgage.

How to use the mortgage calculator

To estimate your mortgage payment with our calculator, here's what you'll need to provide:

The purchase price of the home: This is the amount you agree to pay the seller. It will likely be more than your total loan amount, which will exclude the money you pay upfront toward the purchase.

Down payment: Most mortgages require buyers to make a down payment. They can be as low as 3%, depending on the loan type and your credit score. The calculator's default is 20%, which is the amount you'll need to put down if you want to avoid paying for private mortgage insurance.

Length of the loan: The amount of time it takes to pay off your mortgage, known as the loan term, will have a big impact on cost and affordability. Longer-term loans have lower monthly payments, but you'll pay more total interest. Shorter-term loans come with higher monthly payments and lower overall interest costs. The calculator uses a 30-year term as the default.

Interest rate: Your mortgage's interest rate is the amount your lender charges you for borrowing the money to purchase your home. The higher the interest rate, the more your monthly payments will be, and vice versa. Check out the latest mortgage 

With these inputs, you can use the calculator to help determine how much of a house you can afford and what your monthly payments and overall expenses will be.

Click on "more details" to see how much you might pay in interest over the life of your loan, and how different rates and term lengths can impact that amount. You'll also get some tips on exactly how you can save on interest.

What is included in a mortgage payment?

This mortgage calculator shows you how much you'll pay toward your principal and interest each month, but your actual mortgage payment will likely include a couple other charges.

• Principal: This is the amount you borrow to buy your home. For example, if you want to buy a $400,000 home and have $50,000 for a down payment, you'll need to borrow $350,000. Your loan principal is $350,000. You'll pay a portion of this each month, reducing your principal balance over time.
• Interest: This is what the bank charges you to borrow money. 
• Taxes: Mortgage lenders typically include your property taxes in your monthly mortgage payment and hold this part of your payment in an escrow account. When the taxes come due, the lender will pay them on your behalf using the money in the escrow account. 
• Insurance: As with property taxes, your homeowners insurance premium will also be included in your monthly payment and set aside in an escrow account. If you made a small down payment or you have an FHA mortgage, a small portion of your monthly payment will also go toward a mortgage insurance premium, which protects the lender.

You may see this full mortgage payment amount referred to as "PITI."

How to calculate a mortgage payment

Prefer to do it by hand? You can calculate your monthly mortgage payment (excluding property taxes and insurance) using the following equation:

M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]

"P" is your principal.

The "i" is your monthly interest rate. This is different than the interest rate you see on your mortgage documents. The lender provides the yearly interest rate, so divide that rate by 12 for this equation. If your interest rate is 4.25%, divide 0.0425 by 12 to find your monthly rate: 0.00354166%.

To find "n," the number of months required to repay the loan, multiply the number of years by 12. If you have a 30-year mortgage, multiply 30 by 12 to get 360 months.

Alyssa Powell/Insider

Once you calculate M (monthly mortgage payment), you can add in the monthly property tax and homeowners insurance payment. If you don't already have these numbers but want to get an idea of what you'll pay total every month, see the average property taxes in your state here and the average cost of homeowners insurance by state and home value here.

How a mortgage calculator can help

You've entered numbers into the mortgage calculator — so what can you do with this information?

• Determine how much house you can afford. With our mortgage calculator, you can enter how much you want to spend on a home and the amount you have for a down payment. Together, these numbers reveal how much you need to borrow. If the monthly payment is too high for your current budget, you may decide that you need to buy a less expensive home.
• See how much more you need to save. The calculator also shows how a higher or lower down payment will affect your monthly mortgage payments. This can help you decide if you're ready to buy now, or if it makes more sense to wait a little longer to save more.
• Choose a term length. Input a few term lengths to figure out which one best fits your budget. With a 30-year term, your monthly payments will be lower, but you'll pay more in the long run since you're spreading payments out over a longer period of time. A 15-year term will give you a higher monthly payment but cost less over the years. Play around with term lengths and think about which one best suits your goals.
• Find out how your interest rate affects payments. Maybe you've been prequalified by a few lenders. Use the calculator to compare how each company's interest rate would affect your monthly and long-term payments. This tool can help you on your journey to choosing a lender.
• Learn how to save money. Once you've entered your numbers, we provide a few suggestions on how you can either lower your monthly payments or save in the long term.

What is amortization?

Amortization refers to the process of making payments toward a debt until you've fully repaid it. With a mortgage, you'll make monthly payments that are calculated in a way that allows you to pay off your balance by the end of your term while also accounting for the interest you owe. 

When you get a mortgage, you'll receive an amortization schedule for your loan. This schedule will show you how each of your monthly payments breaks down in terms of how much you're paying toward your principal vs. interest.

For example, say you have a $240,000 mortgage with a 5% interest rate. Your monthly payment would be $1,288. To determine how this payment breaks down each month, you'll need to multiply the loan amount by your interest rate. Then, divide that number by 12 to see how much you'll pay in interest on a monthly basis.

240,000 × 0.05 = 12,000

12,000 / 12 = 1,000

This means that on your very first mortgage payment, you'll pay $1,000 in interest. The remaining $288 will go toward reducing your principal.

To determine how your second monthly payment breaks down, simply subtract the $288 from your principal and run the calculation again with the new loan amount.

You can use a spreadsheet tool like Excel to make it easier to calculate your full amortization schedule, or you can simply use an online amortization calculator.

How lenders decide how much you can afford

Lenders have a responsibility to make sure they aren't lending more than what their borrowers can afford to pay back. This is known as the ability-to-repay rule.

To determine how much you can afford to borrow, lenders will look at your income, debts, assets, employment, and credit. They want to make sure that you have the income to afford your monthly payments, and that a mortgage wouldn't push your debt-to-income ratio (DTI) to an unacceptable level. On conventional loans, you can't have a DTI higher than 50%, and those with lower ratios will typically get better rates. 

But just because a lender says you can afford a certain amount doesn't mean you'll necessarily be comfortable with the monthly payment. Think about what your budget can comfortably handle when deciding your price range. 

How to lower your monthly mortgage payment

You don't want a high mortgage payment that will cause financial distress. There are several ways to lower your monthly payment:

• Make a larger down payment. The higher your down payment, the less you'll need to borrow. 
• Buy a less expensive home. If saving more for a down payment isn't feasible, you may want to buy a home that costs less. This is another way to borrow less money with a mortgage.
• Improve your interest rate. You'll pay less with a lower interest rate, both on your monthly payments and in the long run. Shop around for lenders and apply for prequalification and preapproval with several to compare interest rates. You can also take steps like increasing your credit score or paying down debts to get a better rate.
• Choose a longer term. The longer your term length, the lower your monthly payment will be. Keep in mind that longer terms cost more over the years, though. A 30-year term costs more in the long term than a 15-year term, because you're stretching out payments over a longer period of time and paying interest for longer.

A mortgage calculator can help you see all of your options for buying a home and choose the terms that best fit your situation.

Reasons your monthly mortgage payment could increase

Your monthly mortgage payment amount will likely change slightly over the years, and may go up over time. Two of the most common reasons for this include:

• You have an adjustable-rate mortgage (ARM): Once your ARM's fixed-rate period is over, your rate will reset periodically, and your monthly payment could go up as a result.
• Your taxes or insurance increased: Most borrowers pay their property taxes and homeowners insurance premiums into an escrow account, which the lender pays out of on your behalf when those bills are due. If your taxes or premium have increased, so will your monthly payment.