Mortgage Calculator 2025
Mortgage Calculator: Estimate Your Monthly Payments
A mortgage calculator helps you estimate your monthly mortgage payments based on the loan amount, interest rate, and loan term. It's an essential tool for homebuyers to understand their financial commitments before purchasing a property.
How to Use Our Mortgage Calculator
Our mortgage calculator offers four different calculation modes:
- Basic Calculator - Calculate your monthly payment based on loan amount, interest rate, and term
- Extra Payments Calculator - See how additional payments can reduce your loan term and total interest
- Refinance Calculator - Compare your current mortgage with a potential refinance option
- Affordability Calculator - Determine how much house you can afford based on your income and debt
Ready to buy a home? Compare mortgage rates from top lenders to find the best deal for your situation.
Understanding Mortgage Calculations
The formula used to calculate monthly mortgage payments is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n - 1 ]
Where:
- M = Monthly payment
- P = Principal loan amount
- i = Monthly interest rate (annual rate divided by 12)
- n = Total number of payments (loan term in years multiplied by 12)
Factors That Affect Your Mortgage Payment
Several factors influence your monthly mortgage payment:
- Loan Amount - The total amount borrowed
- Interest Rate - The cost of borrowing money
- Loan Term - The length of time to repay the loan (typically 15 or 30 years)
- Down Payment - The initial payment made when purchasing the home
- Property Taxes - Taxes assessed by local government
- Homeowners Insurance - Insurance that protects your home and belongings
- Private Mortgage Insurance (PMI) - Required if your down payment is less than 20%
Frequently Asked Questions
How much income do I need for a mortgage?
Most lenders use 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% of your gross monthly income.
What's the difference between a 15-year and 30-year mortgage?
A 15-year mortgage has higher monthly payments but lower total interest costs. A 30-year mortgage has lower monthly payments but higher total interest costs over the life of the loan.
How does a larger down payment affect my mortgage?
A larger down payment reduces your loan amount, which lowers your monthly payments and may eliminate the need for private mortgage insurance (PMI).
What is PMI and when is it required?
Private Mortgage Insurance (PMI) protects the lender if you default on your loan. It's typically required when your down payment is less than 20% of the home's purchase price.