Calculate your monthly mortgage payment, see a full amortization schedule, and find out how much house you can afford. Free, accurate, no email required.
| Month | Payment | Principal | Interest | Balance |
|---|
Your monthly mortgage payment has four components, often called PITI: Principal, Interest, Taxes, and Insurance.
The principal and interest portion is calculated using the standard amortization formula:
M = P × [ r(1+r)n ] / [ (1+r)n − 1 ]
Where P = loan amount, r = monthly interest rate, n = total number of payments.
This is one of the most common questions for homebuyers. Here's an objective comparison:
| 30-Year Mortgage | 15-Year Mortgage | |
|---|---|---|
| Monthly Payment | Lower ✅ | Higher ❌ |
| Total Interest | Much higher ❌ | ~60% less ✅ |
| Flexibility | More cash flow ✅ | Less cash flow ❌ |
| Build Equity | Slower | Much faster ✅ |
Example: On a $400,000 loan at 6.5%, a 30-year mortgage costs $511,557 in total interest, while a 15-year mortgage costs only $222,732 — a savings of nearly $289,000.
However, the 15-year payment is about $2,500 higher per month. If you can invest that $2,500 at a return higher than your mortgage rate, the 30-year mortgage may be better financially.
The traditional advice is to put 20% down to avoid PMI (Private Mortgage Insurance). But this isn't always the best move in expensive markets.
The case for a smaller down payment: If you can earn more on your investments than your mortgage rate, it makes sense to put less down. For example, if your mortgage rate is 6.5% and you expect a 10% return in the stock market, the math favors investing rather than paying extra toward the house.
The case for 20% down: PMI typically costs 0.3%–1.5% of the loan amount per year. On a $320,000 loan, that's $1,000–$4,800 per year — pure cost with no equity build. Avoiding PMI is a guaranteed return equal to your PMI rate.
PMI (Private Mortgage Insurance) protects the lender if you default. It's required on conventional loans when your down payment is less than 20%.
Good news: PMI automatically terminates when your loan balance reaches 78% of the original home value. You can also request removal at 80% LTV. FHA loans are stricter — PMI typically lasts 11 years (if 10%+ down) or the entire loan life (if less than 10% down).
Many first-time buyers focus only on principal and interest, then get surprised by the full monthly payment. Here's what to expect:
Making one extra mortgage payment per year (or adding $50–200 to each monthly payment) dramatically reduces your total interest cost and shortens your loan term.
Example on a $400,000 loan at 6.5% (30-year):
This is one of the most debated topics in personal finance. The answer depends on your mortgage rate, your investment return expectations, your risk tolerance, and your psychological relationship with debt.
The math argument for NOT paying off early: If your mortgage rate is 4–6% and you can invest at 8–10% in diversified index funds, you come out ahead by investing rather than paying off the mortgage.
The psychological argument for paying off early: A paid-off house provides immense peace of mind. No lender can take your home if you lose your job or face a crisis. For many people, this guarantee is worth more than the mathematical optimization.