= $80,000 · Loan: $320,000
Total Interest
$408,142
Total P&I (360 pmts)
$728,142
Payoff Date
February 2056
| # | Date | Principal | Interest | Balance |
|---|---|---|---|---|
| 1 | Mar 2026 | $289.28 | $1,733.33 | $319,711 |
| 2 | Apr 2026 | $290.85 | $1,731.77 | $319,420 |
| 3 | May 2026 | $292.43 | $1,730.19 | $319,127 |
| 4 | Jun 2026 | $294.01 | $1,728.61 | $318,833 |
| 5 | Jul 2026 | $295.60 | $1,727.01 | $318,538 |
| 6 | Aug 2026 | $297.20 | $1,725.41 | $318,241 |
| 7 | Sep 2026 | $298.81 | $1,723.80 | $317,942 |
| 8 | Oct 2026 | $300.43 | $1,722.18 | $317,641 |
| 9 | Nov 2026 | $302.06 | $1,720.56 | $317,339 |
| 10 | Dec 2026 | $303.70 | $1,718.92 | $317,036 |
| 11 | Jan 2027 | $305.34 | $1,717.28 | $316,730 |
| 12 | Feb 2027 | $307.00 | $1,715.62 | $316,423 |
How a Mortgage Payment Works
A mortgage payment has two main parts: principal (the amount that reduces your loan balance) and interest (the cost of borrowing). Early in the loan, most of each payment goes to interest; over time, more goes to principal. Our calculator uses the standard amortization formula so you can see this shift month by month.
Your real monthly cost usually includes more than P&I. Lenders often collect property taxes and homeowners insurance in an escrow account and add them to your payment. If you put less than 20% down, PMI is typically required until you reach 80% loan-to-value. HOA fees and upkeep are extra. This tool lets you add all of these for a realistic budget.
What Affects Your Monthly Payment
- Interest rate: A lower rate reduces both the monthly payment and total interest. Even 0.5% can mean a large difference over 30 years.
- Loan term: A 15-year loan has higher monthly payments but much less total interest than a 30-year loan.
- Down payment: A larger down payment lowers the loan amount, the payment, and often the rate. It can also avoid PMI once you reach 20% equity.
- Taxes and insurance: These depend on location and coverage. Including them in your estimate avoids surprises.
Tips for Borrowers
- Use the amortization schedule to see how extra principal payments would shorten the loan and save interest.
- If rates drop, refinancing can cut your payment or term; factor in closing costs before deciding.
- Once you reach 80% LTV, ask your lender to remove PMI so your payment goes down.
- Keep an emergency fund; skipping payments can hurt your credit and lead to foreclosure.
Frequently Asked Questions
- How is the monthly mortgage payment calculated?
- We use the standard amortization formula: M = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the number of payments (years × 12). This gives a fixed payment that pays off the loan by the end of the term.
- What is PMI and when is it required?
- Private Mortgage Insurance (PMI) protects the lender if you default. It’s usually required when your down payment is less than 20% of the purchase price. You can often cancel PMI once your loan-to-value drops to 80% (or 78% in some cases). Our calculator adds PMI when down payment is under 20%.
- What is an amortization schedule?
- An amortization schedule lists each payment, how much goes to principal vs. interest, and the remaining balance. Early on, most of the payment is interest; near the end, most is principal. It helps you plan extra payments and see when you’ll be done paying.
- Should I include property tax and insurance in my budget?
- Yes. Your total housing cost includes principal, interest, property taxes, home insurance, and often HOA or PMI. Many lenders escrow taxes and insurance, so they’re part of your monthly bill. Use the optional fields in this calculator to include them.