Mortgage Calculator

A mortgage is a loan used to buy a home, secured by the property itself. You repay it in fixed monthly installments over a set term — most commonly 30 years in the US, though 15- and 20-year terms are popular for borrowers who want to pay less interest. Each payment covers two core components: principal (the amount you borrowed) and interest (the lender's charge for lending it). In the early years, most of your payment goes toward interest; over time the balance shifts toward principal in a process called amortization.

Your true monthly cost, however, is usually larger than principal and interest alone. Most lenders collect property taxes and homeowners insurance through an escrow account, spreading those annual bills across 12 payments. If your down payment is less than 20% of the home price, lenders typically require Private Mortgage Insurance (PMI), which protects the lender if you default and adds to your monthly cost until you build enough equity.

The size of your payment depends on three levers: the loan amount, the interest rate, and the term. A larger down payment reduces the loan amount and can eliminate PMI. A lower rate — even half a percentage point — can save tens of thousands of dollars over the life of the loan. A shorter term raises the monthly payment but dramatically reduces total interest paid.

In the UK, Canada and Australia, mortgages often use variable rates or shorter fixed-rate periods that reset, but the underlying math of amortization is identical. Whatever your country, running the numbers before you buy helps you set a realistic budget, compare offers from multiple lenders, and avoid becoming "house poor." Always confirm the final figures with a qualified mortgage professional, as rates and required insurance vary daily and by location.