How to Calculate Your Monthly Mortgage Payment
Your monthly mortgage payment is determined by four key factors: the home purchase price, your down payment, the loan term, and the interest rate. Our calculator uses the standard mortgage formula to compute your exact monthly obligation.
Mortgage Payment Formula:
Where:
- M = Monthly payment
- P = Principal loan amount
- r = Monthly interest rate (annual rate ÷ 12)
- n = Total number of payments (loan term in years × 12)
Example — $350,000 Home Purchase:
| Detail | Value |
|---|---|
| Home Price | $350,000 |
| Down Payment (10%) | $35,000 |
| Loan Amount | $315,000 |
| Interest Rate | 6.75% |
| Loan Term | 30 years |
| Monthly Payment (P&I) | $2,042 |
Mortgage Calculator With Taxes and Insurance
Your actual monthly payment is typically higher than principal and interest alone. A complete mortgage payment includes:
| Component | Description |
|---|---|
| Principal | Portion that reduces your loan balance |
| Interest | Cost of borrowing the money |
| Property Tax | Estimated annual tax ÷ 12 |
| Homeowners Insurance | Annual premium ÷ 12 |
| PMI | Required if down payment is less than 20% |
| HOA Fees | If applicable to your property |
Example — Full Monthly Payment Breakdown:
| Component | Monthly Amount |
|---|---|
| Principal & Interest | $2,042 |
| Property Tax (est.) | $350 |
| Homeowners Insurance | $120 |
| PMI (0.5%) | $131 |
| Total Monthly Payment | $2,643 |
Our calculator includes all these components so you get a realistic picture of your true monthly housing cost.
30-Year vs 15-Year Mortgage — Which Is Better?
Choosing the right loan term is one of the most important mortgage decisions you will make. Here is how the two most common options compare on a $300,000 loan at 6.75% interest:
| Feature | 30-Year Mortgage | 15-Year Mortgage |
|---|---|---|
| Monthly Payment | $1,946 | $2,654 |
| Total Interest Paid | $400,560 | $177,720 |
| Total Amount Paid | $700,560 | $477,720 |
| Monthly Savings | — | — |
| Interest Savings | — | $222,840 |
A 30-year mortgage offers lower monthly payments and greater flexibility. A 15-year mortgage costs significantly less over the life of the loan but requires higher monthly payments. The right choice depends on your income, financial goals, and long-term plans.
How Much Down Payment Do You Need?
The down payment is the upfront amount you pay toward the home purchase price. The remainder is financed through your mortgage loan.
Common Down Payment Options:
| Down Payment | Loan Type | PMI Required? |
|---|---|---|
| 3% | Conventional (first-time buyers) | Yes |
| 3.5% | FHA Loan | Yes |
| 10% | Conventional | Yes |
| 20% | Conventional | No |
| 0% | VA / USDA Loan | No |
Putting down at least 20% eliminates the requirement for Private Mortgage Insurance (PMI), which typically costs between 0.5% and 1.5% of the loan amount annually. On a $300,000 loan, that can add $125 to $375 to your monthly payment.
Mortgage Affordability — How Much Can You Borrow?
Before using our mortgage calculator, it helps to understand how much home you can realistically afford. Lenders generally use two key guidelines:
- Front-End Ratio: Your total monthly housing costs should not exceed 28% of your gross monthly income.
- Back-End Ratio (Debt-to-Income): Your total monthly debt payments — including mortgage, car loans, student loans, and credit cards — should not exceed 43% of your gross monthly income.
Affordability Example:
| Detail | Value |
|---|---|
| Annual Gross Income | $80,000 |
| Monthly Gross Income | $6,667 |
| Max Housing Payment (28%) | $1,867 |
| Max Total Debt (43%) | $2,867 |
| Estimated Affordable Home Price | ~$280,000 – $320,000 |
Current Mortgage Rates 2026
Mortgage interest rates significantly impact your monthly payment and the total cost of your loan. As of 2026, approximate average mortgage rates are:
| Loan Type | Average Rate |
|---|---|
| 30-Year Fixed | 6.50% – 7.00% |
| 15-Year Fixed | 5.75% – 6.25% |
| 5/1 ARM | 5.50% – 6.00% |
| FHA Loan (30-year) | 6.25% – 6.75% |
| VA Loan (30-year) | 6.00% – 6.50% |
Note: Rates vary by lender, credit score, loan amount, and down payment. Use the rate your lender quoted you for the most accurate calculation.
Frequently Asked Questions
How much is the monthly payment on a $300,000 mortgage?
On a $300,000 mortgage at 6.75% interest with a 30-year term, the principal and interest payment is approximately $1,946 per month. Adding property taxes, insurance, and PMI typically brings the total to $2,400 to $2,600 per month depending on your location.
How much down payment do I need to buy a house?
Minimum down payment requirements vary by loan type — as low as 3% for conventional loans, 3.5% for FHA loans, and 0% for VA and USDA loans. However, a 20% down payment eliminates PMI and reduces your monthly payment significantly.
What credit score do I need for a mortgage?
Most conventional lenders require a minimum credit score of 620. FHA loans may be available with scores as low as 580 with a 3.5% down payment. Higher credit scores generally qualify for lower interest rates, which can save thousands over the life of the loan.
What is PMI and how much does it cost?
Private Mortgage Insurance (PMI) is required when your down payment is less than 20% on a conventional loan. It typically costs between 0.5% and 1.5% of the loan amount annually — roughly $125 to $375 per month on a $300,000 loan. PMI can be removed once you reach 20% equity in your home.
What is the difference between fixed and adjustable rate mortgages?
A fixed-rate mortgage maintains the same interest rate for the entire loan term, providing predictable monthly payments. An adjustable-rate mortgage (ARM) starts with a lower rate that adjusts periodically based on market conditions, which can result in payment changes over time.
How does making extra mortgage payments help?
Making additional principal payments reduces your loan balance faster, saving you interest over the life of the loan and shortening your payoff timeline. Even one extra payment per year on a 30-year mortgage can reduce the term by 4 to 5 years.
Can I use this calculator to estimate refinance payments?
Yes. Enter your remaining loan balance as the home price, set the down payment to zero, and input your new interest rate and desired loan term to estimate your refinanced monthly payment.
Last updated: 2026 | Estimates based on standard mortgage calculations. Consult a licensed mortgage professional for personalized advice.