How much will your mortgage actually cost — and which loan saves you the most?
This tool is for: First-time homebuyers comparing loan offers · Homeowners evaluating refinancing options · Buyers deciding between 15-year and 30-year terms
- Your exact monthly payment including principal and interest
- Total interest paid over the life of the loan
- How much you save by choosing a shorter term or making extra payments
- The break-even point for refinancing
Formulas Used
Monthly Payment (Fixed-Rate Amortization)
M = P × [r(1+r)^n] / [(1+r)^n - 1]
Where: M = Monthly payment (USD), P = Principal (loan amount) (USD), r = Monthly interest rate (annual rate / 12) (decimal), n = Total number of payments (years × 12) (months)
Source: Standard amortization formula — Consumer Financial Protection Bureau ✓ Verified
Total Interest Over Life of Loan
Total Interest = (M × n) - P
Where: M = Monthly payment (USD), n = Total payments (months), P = Principal (USD)
Source: Derived from amortization formula ✓ Verified
Key Insight
On a typical $280,000 loan, choosing a 15-year term over 30-year saves roughly $150,000-$200,000 in total interest — but requires about $500-$700 more per month.
How Changes Affect Your Result
interest_rate: Each 0.25% rate increase adds roughly $45-50/month on a $280,000 loan, which compounds to ~$16,000-$18,000 more over 30 years.
Frequently Asked Questions
How much house can I afford?
A common guideline is that your monthly mortgage payment (principal + interest) should not exceed 28% of your gross monthly income. Use Mode 1 to calculate the payment for your target home price, then check if it fits within that threshold. If your gross income is $6,000/month, aim for a payment under $1,680.
Should I choose a 15-year or 30-year mortgage?
Use the 15yr vs 30yr Comparison mode. A 15-year term has higher monthly payments but dramatically lower total interest. If you can afford the higher payment without straining your budget, the 15-year term is usually better. If flexibility matters more, take the 30-year and make extra payments when you can.
How much does an extra payment save?
Use the Extra Payment Impact mode. Even $100-$200 extra per month can shave years off your mortgage and save tens of thousands in interest. The key is that extra payments go directly to principal, reducing the balance that future interest is calculated on.
Why is my actual mortgage payment higher than what this calculator shows?
This calculator shows principal and interest only. Your actual monthly payment (often called PITI) also includes property taxes (~1-2% of home value annually), homeowner's insurance (~$1,000-$2,000/year), and possibly private mortgage insurance (PMI) if your down payment is below 20%. These can add $300-$800+ per month.
How does the interest rate affect my total cost?
Significantly. On a $280,000 30-year loan, the difference between 6.0% and 7.0% is about $185/month — which adds up to roughly $67,000 over the life of the loan. This is why rate shopping across multiple lenders is one of the highest-leverage things a homebuyer can do.
About This Calculator
Sources:
- Consumer Financial Protection Bureau — Amortization formula and mortgage terminology
- Federal Reserve Economic Data (FRED) — Historical and current mortgage rate benchmarks
Limitations:
- Does not include property tax, homeowner's insurance, or PMI
- Does not account for adjustable-rate mortgage (ARM) rate changes
- Assumes fixed monthly payments with no payment holidays
- Does not factor in closing costs or origination fees
When to consult a professional: Before signing a mortgage commitment. A loan officer or financial advisor can account for your full financial picture including taxes, insurance, other debts, and rate lock timing.
This mortgage calculator provides estimates based on the standard fixed-rate amortization formula. Actual payments may differ due to property taxes, homeowner's insurance, private mortgage insurance (PMI), HOA fees, and rounding by your lender. This tool does not constitute financial advice.