Step by step
- Select Payment & ownership costs. Enter the home price, down payment, annual interest rate, and loan term in years. Enter property tax as an annual percentage of the home price and home insurance as an annual dollar amount; enter mortgage insurance, HOA fees, and other costs as monthly dollar amounts.
- Read Monthly housing cost, then check Principal & interest and Ownership costs separately. The loan amount is the home price minus the down payment. Reset calculator restores the example values; select Payment & ownership costs to reproduce the example below.
- To compare early repayment, select Extra-payment payoff and enter the loan amount, interest rate, remaining term, and extra payments. The model spreads an extra annual payment evenly across the year and applies a one-time payment before the first interest charge. Start year does not change the calculated payoff duration or interest.
How the calculation works
The fixed-rate monthly loan payment is P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the loan amount, r is the annual rate divided by 1,200, and n is the term in months. At zero interest, payment is P ÷ n. Monthly ownership cost adds home price × annual property-tax percentage ÷ 1,200, annual home insurance ÷ 12, and the entered monthly mortgage insurance, HOA fees, and other costs. Extra-payment payoff reduces the starting balance by the one-time payment, then subtracts the scheduled payment plus extra monthly payment plus one-twelfth of the extra annual payment after each month's interest charge.
Worked example
Select Payment & ownership costs and reset the Mortgage Calculator. Use home price $400,000; down payment $80,000; interest rate 6.5%; loan term 30 years; property tax 1.2% per year; home insurance $1,800 per year; mortgage insurance $0 per month; HOA fee $0 per month; other costs $0 per month. The loan amount is $320,000 across 360 payments. Principal & interest is $2,022.62 per month, property tax is $400 per month, and home insurance is $150 per month, producing a monthly housing cost of $2,572.62. Values are rounded for display after calculation.
Understanding the result
The Mortgage result separates the loan payment from the ownership-cost budget. Entering $0 for mortgage insurance or another cost means it contributes nothing to this estimate; the calculator does not determine eligibility or obtain a lender quote. Ownership costs stay at the entered amounts. The payoff workspace reports a duration and interest estimate using its payment-timing assumptions, so an actual annual lump-sum schedule can produce a different result.
How to check the answer
Check the Mortgage example by subtracting $80,000 from $400,000 to obtain the $320,000 loan. Divide the $4,800 annual property tax and $1,800 annual insurance by 12, then add $400 and $150 to the $2,022.62 principal-and-interest payment. Compare that loan payment with a lender's amortization worksheet using the same rate and term. For payoff comparisons, first set all extra payments to zero, then check the effect of changing one payment amount while keeping the loan terms fixed.