How to use the mortgage calculator
- Choose your country, then enter the home price and your down payment (as an amount or a percentage).
- Enter the interest rate and term; adjust property tax, insurance, PMI and HOA if they apply.
- Read the monthly payment, total interest and payoff date. Add an extra monthly payment to see how much interest and time it saves, and scroll the year-by-year schedule.
The formula behind every fixed-rate mortgage
Monthly payment M = P × i ÷ (1 − (1 + i)−n)
P = amount borrowed, i = annual rate ÷ 12 (as a decimal), n = years × 12.
Each month, interest is charged on the balance still owed and the rest of the payment reduces that balance. Early on, most of the payment is interest: in the first year of a 30-year loan at 6.5%, about 84% of what you pay goes to interest. Because the balance falls, the interest share shrinks every month until the last payments are almost all principal. The schedule above shows this year by year.
What goes into the full monthly cost
Property tax is set locally. In the US it averages around 1% of value a year, from about 0.3% in Hawaii to over 2% in New Jersey and Illinois; lenders usually collect it monthly into escrow. Canada averages 0.5–1.5% by city, Australian council rates are a few thousand dollars a year, and the UK has council tax instead, which is paid separately from the mortgage, so it is set to zero for the UK here.
Home insurance is required by the lender everywhere. US premiums have risen sharply in Florida, California, Texas and Louisiana because of storm and wildfire losses; check a quote before you commit.
PMI (US only) applies when the down payment is under 20% on a conventional loan. FHA loans charge a different mortgage insurance premium, and VA loans charge none. Canada's equivalent, CMHC insurance, is a one-off premium of 2.8–4% added to the loan when you put down less than 20%; Australia's lenders mortgage insurance works the same way. Add those to the home price if they apply.
Country differences that change the answer
United States: the 30-year fixed rate is standard and the rate is locked for the whole term. Canada: amortization is usually 25 years (30 for some insured first-time buyers), but the rate is fixed only for a 1–5 year term and then renewed at the market rate, and interest compounds semi-annually. United Kingdom: rates are fixed for 2, 5 or 10 years and then revert to the lender's standard variable rate unless you remortgage; 25–35 year terms are common. Australia: most loans are variable rate over 30 years, often with an offset account that cuts interest by holding savings against the balance. Singapore: loans are capped at 75% LTV for a first property and 30 years for HDB flats; floating rates track SORA.
For fixed-for-a-few-years products (UK, Canada), the calculator assumes today's rate holds for the full term. That is the right figure for comparing deals today, but your payment will change when the fixed period ends.
Extra payments: the highest guaranteed return for most borrowers
An extra payment saves interest at your mortgage rate, risk-free and tax-free. On a $320,000 loan at 6.5% over 30 years, adding $200 a month cuts total interest from about $408,000 to about $303,000 and ends the loan six and a half years early. One extra full payment a year (or switching to biweekly payments in the US) has a similar effect. Before doing it, keep an emergency fund and pay off higher-interest debt first.
Worked example
A $400,000 home with 20% down is a $320,000 loan. At 6.5% for 30 years: i = 0.065 ÷ 12 = 0.005417, n = 360, so M = 320,000 × 0.005417 ÷ (1 − 1.005417−360) = $2,022.62. Add property tax of $4,400 a year ($366.67) and insurance of $1,800 ($150): $2,539.28 a month. Over the full term you repay $728,143, of which $408,143 is interest.
General information, not financial advice. Rates, taxes and lending rules change; confirm figures with a lender or mortgage broker.
Questions and answers
How is a mortgage payment calculated?
With the standard amortization formula M = P × i ÷ (1 − (1 + i)^−n), where P is the amount borrowed, i the monthly interest rate and n the number of monthly payments. A $320,000 loan at 6.5% over 30 years is $2,022.62 a month in principal and interest. Property tax, insurance, PMI and HOA dues are added on top to give the full monthly cost.
What is PMI and when does it stop?
Private mortgage insurance protects the lender on US conventional loans when you put down less than 20%. It usually costs 0.3–1.5% of the loan a year. By federal law (the Homeowners Protection Act) it ends automatically when the balance is scheduled to reach 78% of the original value, and you can ask for it to be removed at 80%. The calculator applies it until the 78% point.
Why is my Canadian mortgage payment different from a US calculator?
The Canadian Interest Act requires fixed-rate mortgage rates to be compounded semi-annually, not monthly. A 5% Canadian rate is equivalent to about 4.95% compounded monthly, so payments are slightly lower than a US calculator shows. Select Canada and this calculator uses the semi-annual method.
How much do extra payments save?
A lot, because every extra dollar goes straight to principal and stops accruing interest for the rest of the loan. On a $320,000, 30-year loan at 6.5%, an extra $200 a month saves about $105,000 of interest and pays the loan off six and a half years early. Check that your lender has no prepayment penalty; in the UK most fixed deals allow 10% a year without a fee.
How much house can I afford?
A common lender guide in the US is that housing costs (principal, interest, tax, insurance) stay under 28% of gross monthly income and all debts under 36% (43–50% for some loan programs). UK lenders typically lend 4–4.5 times household income; Australian banks test repayments at the rate plus a 3% buffer; Canada applies a stress test at the higher of your rate plus 2% or 5.25%.
Is this the same as my lender's quote?
The principal-and-interest figure will match to the cent for a fixed-rate loan with the same rate and term. Your actual payment may differ because of escrow for local taxes, the insurance policy you choose, lender fees rolled into the loan, or an adjustable rate. Use the APR on your Loan Estimate (US) or ESIS (UK) to compare lenders like for like.
Free to use, runs in your browser, nothing uploaded. Last updated 2026-10-07. Made by HandyToolkits; questions to [email protected].