How are mortgage payments calculated?

We use the standard amortization formula for fixed-rate loans using your principal, APR, and term.

Are taxes, insurance, and PMI included?

To keep the model precise and comparable, results are P&I only; escrow items are excluded.

Can I use a 0% interest rate?

Yes. The calculator switches to the zero-interest case where monthly payment equals principal divided by months.

Why might my lender’s numbers differ?

Posting dates, rounding, daily interest methods, and fees can cause slight differences.

Mortgage Calculator | Monthly Payment, Total Interest & Amortization

Data Source and Methodology

This calculator implements the standard fixed-rate amortization method widely used in finance education and industry. See also authoritative primers such as OpenStax Business Mathematics (Amortized Loans) and the CFPB explainer on amortization for consumer guidance. These references ground the formulas and definitions used here.

The Formula Explained

Monthly rate: $ i = \text{APR}/100/12 $
Number of payments: $ n = 12 \times \text{years} + \text{months} $
Monthly payment (for $ i > 0 $): $ M = PV \cdot \dfrac{i}{1 - (1+i)^{-n}} $.
Zero-interest case: $ M = PV / n $.

Glossary of Terms

Loan Amount (PV): Principal borrowed.
APR: Annual percentage rate (nominal); converted to a monthly rate.
Term: Total months over which the loan is repaid.
Monthly Payment (M): Principal and interest only (P&I), excluding escrow items.

How It Works: A Step-by-Step Example

Borrow $ \$200{,}000 $ at 5% APR for 30 years ($ n = 360 $). The monthly rate is $ i = 0.05/12 $. Using the formula:

$ M = 200000 \cdot \dfrac{0.05/12}{1 - (1+0.05/12)^{-360}} \approx \$1{,}073.64 $.
Total paid $ \approx \$1{,}073.64 \times 360 = \$386{,}511 $; Total interest $ \approx \$186{,}511 $.

Frequently Asked Questions (FAQ)

Are taxes, insurance, or PMI included?

No. This tool models principal and interest (P&I) only for clarity and comparability.

Can results differ from my lender’s disclosure?

Minor differences can arise from daily interest methods, posting dates, rounding to the cent, or added fees.

Does this support extra payments?

Use our Mortgage Payoff Calculator to model monthly extras or lump-sum prepayments.

Tool developed by Ugo Candido. Content reviewed by the CalcDomain Editorial Team.
Last reviewed for accuracy on: September 13, 2025.

Mortgage Calculator

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