Mortgage Calculator

Estimate your payments including taxes, insurance, extra payments, and more.

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The Advanced Mortgage Calculator provides detailed insights into your loan, including monthly payments, interest breakdown, and amortization schedule. Use it to plan your finances effectively and explore different scenarios.

Estimated Summary

Monthly Pay: $0.00

Includes taxes, insurance, and extra payments

Loan Summary
  • Loan Amount: $0.00
  • Total Interest: $0.00
  • Payoff Date: --

Amortization Schedule

Month Payment Principal Interest Balance

Principal vs. Interest Over Time

Understanding Mortgages

Key Mortgage Concepts

Principal is the original amount borrowed, while interest is the cost of borrowing that money.

In the early years of a mortgage, most of your payment goes toward interest. As time passes, more of your payment goes toward reducing the principal.

For a $300,000 loan at 6% for 30 years, your first payment would typically be about $1,799, with $1,500 going to interest and only $299 toward principal.

Amortization is the process of paying off your loan over time through regular payments.

An amortization schedule shows how each payment is applied to both the principal and interest, and how the loan balance decreases over time.

Understanding amortization can help you make informed decisions about extra payments and refinancing opportunities.

An escrow account is a separate account maintained by your mortgage servicer to pay for property taxes and homeowners insurance.

Each month, a portion of your mortgage payment goes into this account, which is then used to pay these expenses when they come due.

Escrow accounts help ensure these important expenses are paid on time, which protects both you and the lender.

How Biweekly Payments Save Money

Making biweekly payments instead of monthly payments can help you:

  • Make an extra payment each year - Since there are 52 weeks in a year, paying half your monthly amount every two weeks results in 26 half-payments, or 13 full payments (instead of 12).
  • Reduce interest costs - By applying payments to the principal more frequently, you reduce the amount of interest that accrues.
  • Pay off your mortgage earlier - A 30-year mortgage can be paid off in roughly 25-26 years with biweekly payments.
Example: On a $300,000 mortgage at 6% for 30 years, biweekly payments could save you approximately $45,000 in interest and pay off your mortgage 4 years early.

Real-Life Mortgage Scenarios

First-Time Homebuyer
The Martinez Family
  • Home Price: $350,000
  • Down Payment: 5% ($17,500)
  • Loan Term: 30 years
  • Interest Rate: 6.5%
  • Monthly Payment: $2,096

The Martinez family is buying their first home with a small down payment. They're focused on keeping their monthly payment affordable while building equity.

Strategy: As their income grows, they plan to make small extra payments toward principal to build equity faster and eventually eliminate PMI.
Moving Up Buyer
The Johnson Family
  • Home Price: $550,000
  • Down Payment: 20% ($110,000)
  • Loan Term: 20 years
  • Interest Rate: 6.125%
  • Monthly Payment: $3,178

The Johnsons are selling their starter home and using the equity as a down payment on a larger family home. They chose a 20-year term to pay off their mortgage before retirement.

Strategy: They make biweekly payments to shave approximately 2 years off their loan term and save on interest costs.
Empty Nesters
The Patel Family
  • Home Price: $450,000
  • Down Payment: 40% ($180,000)
  • Loan Term: 15 years
  • Interest Rate: 5.875%
  • Monthly Payment: $2,147

The Patel family is downsizing after their children left home. They used a large portion of the proceeds from their previous home as a down payment.

Strategy: With retirement approaching, they chose a 15-year term and make one additional payment per year to be mortgage-free before retiring.

Frequently Asked Questions

A higher down payment has several benefits:

  • Lower loan amount - You borrow less money, reducing the total interest paid over the life of the loan.
  • Lower monthly payments - Less borrowed means smaller payments each month.
  • No PMI - Down payments of 20% or more usually eliminate the need for Private Mortgage Insurance.
  • Better interest rates - Lenders may offer lower rates for larger down payments due to reduced risk.
  • More equity from day one - You start with more ownership in your home.

Feature 15-Year Mortgage 30-Year Mortgage
Monthly Payment Higher Lower
Interest Rate Typically lower by 0.25%-0.75% Typically higher
Total Interest Paid Much less Much more (often 2-3 times as much)
Equity Building Faster Slower
Budget Flexibility Less (higher payment) More (lower payment)

For example, on a $300,000 loan at 6%:

  • 15-year term: $2,532 monthly payment, $155,831 total interest
  • 30-year term: $1,799 monthly payment, $347,515 total interest

Benefits of making extra payments:

  • Pay off your mortgage earlier
  • Save thousands in interest over the life of the loan
  • Build equity faster
  • More financial freedom later

When you might want to invest instead:

  • If you have high-interest debt (credit cards, personal loans)
  • If your mortgage interest rate is low (below 4-5%)
  • If you haven't maxed out retirement accounts
  • If you don't have an adequate emergency fund
Tip: Even small extra payments can make a big difference. Adding just $100 per month to a $300,000, 30-year mortgage at 6% would save about $50,000 in interest and pay off your loan 4 years earlier.

Mortgage points (also called discount points) are fees you pay to the lender at closing in exchange for a reduced interest rate. One point costs 1% of your mortgage amount (e.g., $3,000 on a $300,000 loan).

When points make sense:

  • You plan to keep the home/loan for a long time
  • You have enough cash for closing costs and a sufficient down payment
  • The break-even period is reasonable (typically 3-7 years)

When points may not make sense:

  • You might move or refinance within a few years
  • Cash is tight and you need money for other expenses
  • Interest rates might fall significantly in the near future

Break-even calculation: If one point ($3,000) reduces your payment by $50/month, it would take 60 months (5 years) to break even.

Your monthly mortgage payment typically includes four components, often referred to as PITI:

  • Principal: Payment toward the loan balance
  • Interest: The cost of borrowing the money
  • Taxes: Property taxes collected and held in escrow
  • Insurance: Homeowner's insurance also held in escrow

For many homeowners, taxes and insurance can add a significant amount to the monthly payment:

  • Property taxes typically range from 0.5% to 2.5% of your home's value annually, depending on location
  • Homeowner's insurance averages $1,200-$2,000 per year but varies based on location, home value, and coverage
  • In some areas with natural disaster risks, you may need additional insurance (flood, earthquake, etc.)
Important: Even after your mortgage is paid off, you'll still need to pay property taxes and homeowner's insurance on your own.