Mortgage Calculator

What this calculator does

This calculator estimates monthly housing payment components: principal and interest (P&I), property tax (monthly), insurance (monthly), and total payment. It supports an extra payment per month to see how much sooner the loan pays off and how much interest you save. All amounts are in the same currency (e.g. dollars).

It is useful for home buyers and refinancers comparing payment scenarios and for anyone exploring the impact of extra principal. Lenders and realtors often use similar tools for quick estimates. It assumes fixed rate, level payments, and no PMI or prepayment penalties.

How to use it

1. Enter Principal (loan amount), Annual interest rate (e.g. 6 for 6%), and Term in years (e.g. 30).
2. Enter Annual property tax and Annual insurance (if any); leave 0 if not applicable or if you prefer P&I only.
3. Optionally enter Extra payment per month to see payoff time and interest saved.
4. Read P&I, tax, insurance, total payment, and (with extra) payoff months and interest saved in the Result section.

Inputs are in the left panel; the result updates as you change values. All dollar amounts use the same unit (e.g. USD).

Formulas used

• Principal & interest (P&I):
  P&I = P × r × (1 + r)^n / ((1 + r)^n − 1)
  with P = principal, r = monthly rate (annual ÷ 12), n = number of monthly payments (years × 12). This is the standard amortizing loan formula.

• Monthly tax = annual property tax ÷ 12.

• Monthly insurance = annual insurance ÷ 12.

• Total payment = P&I + monthly tax + monthly insurance.

• With extra payment: The calculator simulates the amortization month by month, applying (P&I + extra) each month until the balance is paid off. Payoff months = number of months until balance ≤ 0. Interest saved = (interest that would have been paid over the original term) − (actual interest paid with extra payments). Even small extra principal can significantly reduce total interest and payoff time.

Interpretation & examples

• Example 1: $300,000 at 6% for 30 years → P&I ≈ $1,799/month. With $200 extra/month → payoff in about 26 years, with substantial interest saved (often tens of thousands of dollars).
• Example 2: $250,000 at 5.5% for 30 years, $3,000/year tax, $1,200/year insurance → P&I ≈ $1,419, total payment ≈ $1,719/month.
• Example 3: Same $300k at 6%, 30 years, with $500 extra/month → payoff in roughly 22 years; interest saved can exceed $100,000 depending on exact terms.

Extra principal reduces the payoff period and total interest; the result shows by how much. Use it to compare different extra-payment amounts.

History & background

The standard mortgage formula is the same present-value annuity formula used for other amortizing loans. Property tax and insurance are often escrowed and paid with the loan payment in the US. Extra principal payments are a common way to shorten the loan and save interest; many lenders allow them without penalty on conventional fixed-rate loans.

Limitations & safety notes

• Not financial or legal advice. Assumes fixed rate, level payments, and no fees or prepayment penalties. Actual loans may have PMI, variable rates, or other terms.
• Property tax and insurance are estimates; use for planning only and confirm with your lender and local records. Tax rates and insurance costs vary by location and insurer.
• For legal or tax implications of extra payments or refinancing, consult a qualified professional.