How the Mortgage Calculator Works
This mortgage calculator uses the standard amortization formula to compute your monthly payment from three inputs: the loan amount (home price minus down payment), the annual interest rate, and the loan term in years. It then multiplies the monthly payment by the total number of payments to show you how much interest you will pay over the life of the loan.
For a $350,000 home with 20% down ($70,000) at 6.5% for 30 years, the monthly payment is roughly $1,770 and you will pay about $357,000 in interest over the full term — more than the original loan. This is why even a small rate reduction or a shorter term can save tens of thousands of dollars.
Tips to Lower Your Mortgage Cost
Improve your credit score before applying — even half a percent lower rate saves thousands. Consider a 15-year term if you can afford the higher monthly payment. Make one extra payment per year to shave years off the loan. And always compare offers from at least three lenders.
Related Calculators
- Home Loan EMI Calculator — for Indian home loans
- Stamp Duty Calculator — UK property tax
- Rent vs Buy Calculator — should you rent or buy?
- Investment Calculator — grow your down payment savings
Frequently Asked Questions
How is the mortgage payment calculated?
The standard formula is M = P[r(1+r)^n]/[(1+r)^n – 1] where P is the loan amount, r is the monthly interest rate, and n is the number of payments.
What is a good mortgage rate in 2026?
Rates vary by country and credit score. In the US, 30-year fixed rates have ranged from 5.5% to 7.5% in recent years. Shop around for the best rate.
Should I make a 20% down payment?
A 20% down payment avoids private mortgage insurance (PMI) in the US and reduces your monthly payment. But smaller down payments let you buy sooner.
How does the loan term affect total cost?
A 15-year mortgage has higher monthly payments but much less total interest than a 30-year mortgage. Use this calculator to compare both.