How to calculate your mortgage payments

Here’s how to use our mortgage calculator to easily estimate payments:

  1. Enter your home price. In the Home price field, input the price of the home you’re buying (or the current value of your home if you’re refinancing).
  2. Enter your down payment. In the Down payment field, input the amount of your down payment (if you’re buying) or the amount of equity you have (if you’re refinancing). You can input either a dollar amount or percentage.
  3. Enter your loan term. In the Loan term field, enter the length of your loan — usually 30 years, but could be 20, 15 or 10.
  4. Enter your interest rate. In the Interest rate field, input the rate you expect to pay or are currently paying. Our calculator defaults to the current average rate, but you can adjust this percentage.
  5. Enter your ZIP code. In the ZIP code field, input your zip code.
  6. Click Update.

Bankrate’s calculator also estimates property taxes, homeowners insurance and homeowners association fees. You can edit these amounts, or even edit them to zero, as you’re shopping for a loan.

In addition, the calculator allows you to input extra payments (under the “Amortization” tab). This can help you decide whether to prepay your mortgage and by how much.

Typical costs included in a mortgage payment

The major part of your mortgage payment is the principal and the interest. The principal is the amount you borrowed, while the interest is the sum you pay the lender for borrowing it. Your lender also might collect an extra amount every month to put into escrow, money that the lender (or servicer) then typically pays directly to the local property tax collector and to your insurance carrier.

Mortgage payment formula

For the mathematically inclined, here’s a formula to help you calculate mortgage payments manually:

Symbol M Total monthly mortgage payment P Principal loan amount r Monthly interest rate: Lenders provide you an annual rate so you’ll need to divide that figure by 12 (the number of months in a year) to get the monthly rate. If your interest rate is 5 percent, your monthly rate would be 0.004167 (0.05/12=0.004167). n Number of payments over the loan’s lifetime: Multiply the number of years in your loan term by 12 (the number of months in a year) to get the number of payments for your loan. For example, a 30-year fixed mortgage would have 360 payments (30×12=360).

This formula can help you crunch the numbers to see how much house you can afford. Alternatively, you can use this mortgage calculator to help determine your budget.