Free Mortgage Calculator with Amortization Schedule

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Home & Loan Details
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Monthly Cost Add-ons (optional)
PMI typically applies when down payment is below 20%.
Monthly Payment Breakdown Updates instantly
Total Monthly Payment
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Principal & Interest —
Property Tax —
Home Insurance —
PMI —
Loan Amount —
Total Interest Paid —
Total Cost of Home —
Year Principal Paid Interest Paid Balance Remaining
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Calculate your monthly mortgage payment including principal, interest, property tax, insurance, and PMI. See your full amortization schedule instantly.

How Mortgage Payments Are Calculated

A mortgage payment consists of two core components: principal and interest. The principal is the portion of each payment that reduces your outstanding loan balance. The interest is the cost the lender charges you for borrowing that money. In the early years of a mortgage, most of each payment goes toward interest. As the balance decreases over time, a growing share of each payment chips away at the principal — a process called amortization.

The standard formula for calculating a fixed-rate monthly mortgage payment (principal and interest only) is:

M = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1]

Where M is the monthly payment, P is the loan principal (home price minus down payment), r is the monthly interest rate (annual rate divided by 12), and n is the total number of monthly payments (loan term in years multiplied by 12). This calculator handles all of that maths automatically — just enter your numbers and the results update in real time.

What Is Amortization?

Amortization is the process of paying off a loan through regular, scheduled payments over time. Each payment in an amortizing loan is split between interest and principal. Because interest is calculated on the remaining balance, early payments are interest-heavy — for a 30-year mortgage at 6.5%, the first payment might apply only 20% to principal. By the final year, the split reverses and most of each payment reduces the loan balance directly.

The amortization schedule table below the calculator shows a year-by-year summary: how much principal you pay each year, how much goes to interest, and what balance remains. This schedule is useful for understanding the long-term cost of different loan terms. A 15-year mortgage has a higher monthly payment but saves dramatically on total interest compared to a 30-year term on the same loan amount and rate.

How Much House Can I Afford?

A widely used rule of thumb in the United States is the 28/36 rule: your monthly housing costs (mortgage, taxes, and insurance) should not exceed 28% of your gross monthly income, and your total debt payments (including car loans, student loans, and credit cards) should not exceed 36%. In the United Kingdom, most lenders use an income multiple of 4–4.5x your annual salary as the maximum mortgage they will offer. In Australia, the Australian Prudential Regulation Authority (APRA) requires lenders to stress-test mortgage affordability at 3 percentage points above the current rate.

Down payment size also significantly affects affordability. In the US, a down payment below 20% typically requires Private Mortgage Insurance (PMI), which adds to your monthly cost. In the UK, a 10% deposit is common, though a 25% deposit typically unlocks better interest rates. In Australia, lenders require Lenders Mortgage Insurance (LMI) for loans with a deposit below 20%.

Understanding PMI

Private Mortgage Insurance (PMI) is a policy that protects the lender — not the borrower — if you default on the loan. In the United States, lenders typically require PMI when the down payment is less than 20% of the home's purchase price. PMI rates generally range from 0.2% to 2% of the loan amount annually, depending on the loan size, down payment percentage, credit score, and loan type. Once your home equity reaches 20% (or the loan-to-value ratio drops to 80%), you can typically request to have PMI removed. This calculator includes a PMI field so you can see its full impact on your monthly budget.

Frequently Asked Questions

Mortgage rates fluctuate with central bank policy and market conditions. In the US, rates on 30-year fixed mortgages have ranged from 3% to over 7% in recent years. In the UK, 5-year fixed rates have varied between 4% and 6%. In Australia, standard variable rates have been between 5.5% and 7%. Generally, a rate below the current market average for your loan type is considered competitive. Comparison shopping across multiple lenders is strongly recommended.

A 15-year mortgage costs significantly less in total interest and builds equity faster, but requires a higher monthly payment — often 30–40% more than a 30-year loan for the same principal. A 30-year mortgage offers a lower monthly payment and more cash flow flexibility. Many financial advisors recommend a 30-year mortgage if the monthly savings will be invested consistently, since long-run investment returns have historically exceeded mortgage interest rates.

Yes. Enter your annual property tax and home insurance amounts in the optional fields and the calculator adds them to your total monthly payment. These amounts are divided by 12 and shown as separate line items, so you can see exactly what each component costs.

In the US, the Homeowners Protection Act gives you the right to request PMI cancellation once your loan-to-value ratio reaches 80% (20% equity). Lenders are required to automatically terminate PMI once the LTV reaches 78% based on the original amortization schedule. Making extra principal payments can accelerate this timeline significantly. The amortization schedule in this calculator shows your balance each year, helping you estimate when you will hit the 80% LTV threshold.

In the US, 20% is the traditional benchmark that eliminates PMI. However, many buyers put down 3–5% using FHA, VA, or conventional low-down-payment programs. In the UK, the minimum is typically 5–10%, with better rates available at 25–40% deposit. In Australia, the standard minimum is 5% (Genuine Savings), though 20% avoids LMI. A larger down payment reduces your monthly payment and total interest paid, but reduces your liquid savings buffer.

This calculator uses the standard fixed-rate amortization formula and produces results accurate to within a few cents of the exact figure. It does not account for variable-rate adjustments, closing costs, escrow shortfalls, or HOA fees. For precise figures, consult your mortgage lender or broker, who will provide a Loan Estimate document.

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