How to Calculate Your Monthly Mortgage Payment

If you're thinking about buying a home, there's one number that matters more than the listing price, the interest rate, or even the neighborhood: your monthly payment. That's the number that has to fit in your budget every single month for the next 15 or 30 years.

The good news is you don't need a finance degree to figure it out. Three things determine your monthly payment: how much you borrow, your interest rate, and how long you take to pay it back. Plug those into the calculator below and you'll have your answer in seconds.

Table of Contents

• Calculate Your Payment
• The Three Things That Determine Your Payment
• What Your Payment Actually Covers
  • Putting It All Together
• How Rate Changes Affect Your Payment
• 15-Year vs 30-Year: The Tradeoff
• What About Extra Payments?
• When to Run These Numbers
• Know Your Number

Calculate Your Payment

Adjust the numbers below to match your situation. The calculator shows your principal and interest payment plus estimates for taxes, insurance, and PMI (if applicable).

A couple of notes on those estimates: property taxes vary wildly by location (the calculator uses a 1.25% estimate), and insurance costs depend on the home and where you live. Your actual totals will differ, but this gives you a solid ballpark.

The Three Things That Determine Your Payment

Every mortgage payment comes down to three inputs. Change any one of them and the payment changes.

How much you borrow. This is the home price minus your down payment. A $400,000 home with 20% down means a $320,000 loan. Put less down and you borrow more, which means a higher payment (plus you'll probably pay mortgage insurance).

Your interest rate. Even a small difference here adds up fast. On a $320,000 loan, the difference between 6% and 7% is about $210 per month. Over 30 years, that's more than $75,000. This is why shopping around for the best rate matters so much.

Your loan term. Most people choose 30 years because it keeps the monthly payment lower. A 15-year mortgage means higher payments but dramatically less interest over time.

What Your Payment Actually Covers

Your mortgage statement won't just show the principal and interest number from the calculator above. There are a few other line items that get bundled in, and they can add up.

Principal and interest is the core payment that goes toward paying off your loan. Early on, most of it goes to interest. Over time, more and more goes toward the actual balance.

Property taxes get collected by your lender and held in an escrow account. The amount depends entirely on where you live. A $400,000 home might cost $333 a month in property taxes in one state and $667 in another.

Homeowner's insurance is required by your lender and typically runs $100 to $300 per month, depending on the home, location, and coverage level.

Private mortgage insurance (PMI) kicks in if you put less than 20% down. It usually costs 0.5% to 1% of your loan amount per year. On a $320,000 loan, that's roughly $133 to $267 per month. The good news: once you build 20% equity, it goes away.

HOA fees are separate from your mortgage but still part of your housing cost. If the property has an HOA, budget $100 to $500+ per month on top of everything else.

Putting It All Together

For a $400,000 home with 20% down at 6.5%:

That total is the number that matters when you're figuring out how much house you can afford and whether the payment fits within your debt-to-income ratio.

How Rate Changes Affect Your Payment

Even small rate movements make a real difference. Here's what happens to the monthly payment on a $320,000 loan over 30 years:

A handy rule of thumb: every 0.5% increase in rate adds roughly $65 per month per $100,000 borrowed.

This is why even a 0.25% rate difference is worth shopping for, and why buying points can make sense if you plan to stay in the home long enough to recoup the upfront cost.

15-Year vs 30-Year: The Tradeoff

A 15-year mortgage comes with a higher monthly payment, but the interest savings over the life of the loan are staggering.

The 15-year rate is typically 0.5% to 0.75% lower than the 30-year rate, which helps offset the higher payment. On a $320,000 loan, choosing 15 years saves roughly $175,000 in total interest. That's a huge number, but it only makes sense if you can comfortably afford the higher monthly payment without stretching your budget thin.

What About Extra Payments?

You don't have to choose between 15 and 30 years. Adding even a little extra to your monthly payment can shorten a 30-year loan significantly.

On a $320,000 loan at 6.5%:

• Extra $100/month: Pay off 4 years early, save $56,000 in interest
• Extra $200/month: Pay off 7 years early, save $97,000 in interest
• Extra $500/month: Pay off 12 years early, save $168,000 in interest

Extra payments go entirely toward principal, which reduces the balance that interest is calculated on. The earlier you start, the bigger the snowball effect.

When to Run These Numbers

Pull up the calculator above before you:

• Start house hunting so you know your payment ceiling, not just a price range
• Compare lender offers by plugging in different rates on the same loan amount
• Decide between renting and buying by comparing rent to the full monthly cost (not just P&I)
• Think about refinancing to see if a lower rate saves you enough
• Choose between loan terms by toggling between 15 and 30 years

Know Your Number

Your monthly mortgage payment is the single most important number in the home-buying process. It determines what you can afford, how much house you should target, and whether a particular interest rate works for your budget.

Use the calculator above with your actual numbers, and always remember to factor in taxes, insurance, and any PMI on top of the principal and interest. That total number is what needs to fit comfortably in your budget, not just the loan payment by itself.