| Year | Principal Paid | Interest Paid | Remaining Balance |
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About this tool
A mortgage represents a standard amortized loan structured to finance physical real estate purchases globally.
Amortization Payment Formula
The standard monthly principal and interest payment (M) required to fully amortize a mortgage loan amount over a fixed term is calculated using the formula:
Where:
- M is the monthly payment amount.
- P is the starting loan principal amount (Home Price minus Down Payment).
- r is the monthly interest rate (Annual rate divided by 12).
- n represents the total number of monthly payments over the term (n = t × 12).
This calculator computes complete amortization tables instantly, allowing you to track exactly how much principal and interest you pay over the lifetime of your loan.
Frequently asked questions
Everything you need to know about Mortgage Calculator.
How is the monthly mortgage payment calculated?
The formula is: M = P[r(1+r)^n] ÷ [(1+r)^n − 1], where P is the principal loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments. For a $300,000 loan at 6.5% over 30 years: M ≈ $1,896/month.
What is an amortization schedule?
An amortization schedule is a table showing the breakdown of each payment into interest and principal over the life of the loan. Early payments are mostly interest (with little principal reduction); later payments flip — more goes to principal. The schedule reveals your total interest cost and your loan balance at any point in time.
How does the size of my down payment affect my monthly payment?
A larger down payment reduces the loan principal directly. On a $400,000 home, a 10% down payment ($40,000) leaves a $360,000 loan; a 20% down payment ($80,000) leaves a $320,000 loan. At 6.5%, the 20% down option saves approximately $238/month and over $85,000 in total interest over 30 years.
What is the difference between a fixed-rate and variable-rate mortgage?
A fixed-rate mortgage locks your interest rate for the entire loan term — payments never change, making budgeting predictable. A variable (adjustable) rate mortgage (ARM) has an initial fixed period (e.g. 5 years), then adjusts periodically based on a market index. ARMs often start with lower rates but carry the risk of payment increases.
Does the calculator include property taxes and homeowners insurance?
The base calculator shows principal and interest (P&I) only. Use the PITI toggle to add estimates for Property taxes, Insurance, and optionally PMI (Private Mortgage Insurance, required when the down payment is less than 20%). PITI gives a more realistic picture of your true monthly housing cost.