How to Use the Mortgage Calculator
Our free mortgage calculator helps you estimate your monthly payment in seconds. Simply enter your home price, down payment, interest rate and loan term, then click calculate. The results show your monthly payment, total interest paid and total cost of the loan.
What is a Mortgage?
A mortgage is a loan used to purchase a home or property. You borrow money from a bank or lender and repay it over time, typically 15 to 30 years, with interest. Your home serves as collateral for the loan.
How is a Mortgage Payment Calculated?
Your monthly mortgage payment is calculated using a formula that takes into account the loan principal (home price minus down payment), the annual interest rate, and the loan term. The formula ensures equal payments every month, with more going toward interest early on and more toward principal later — this is called amortization.
Mortgage Rates by Country (2025)
- United States: Average 30-year fixed rate around 6.5–7.0%
- Canada: 5-year fixed rate around 5.0–5.5%
- United Kingdom: 2-year and 5-year fixed rates around 4.5–5.5%
- Australia: Variable and fixed rates around 6.0–6.5%
Tips to Get a Lower Mortgage Rate
- Improve your credit score before applying — aim for 740+ in the US
- Save a larger down payment (20% or more eliminates PMI)
- Pay down existing debt to lower your debt-to-income ratio
- Compare quotes from multiple lenders — banks, credit unions, and brokers
- Consider buying mortgage points to lower your rate long-term
Frequently Asked Questions
How much house can I afford?
A common guideline is the 28/36 rule — your mortgage payment should not exceed 28% of your gross monthly income, and your total debt payments should not exceed 36%. Use our calculator to find a payment that fits comfortably within these limits.
What is included in a monthly mortgage payment?
Your monthly payment typically includes Principal (the loan amount), Interest, Property Taxes, and Home Insurance — often called PITI. Our calculator shows the principal and interest portion; you should add estimated taxes and insurance to get your full monthly cost.
Should I choose a 15-year or 30-year mortgage?
A 30-year mortgage offers lower monthly payments but costs significantly more in interest over time. A 15-year mortgage has higher payments but you build equity faster and pay much less interest. Use the calculator above to compare both options with your numbers.
What is PMI (Private Mortgage Insurance)?
PMI is required in the US when your down payment is less than 20%. It protects the lender if you default. PMI typically costs 0.5%–1.5% of the loan amount annually. Once you reach 20% equity, you can request its removal.