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Monthly payment breakdown
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Amortization schedule — yearly
| Year | Principal | Interest | Balance |
|---|
Common loan amounts & scenarios
What affects my payment?
Your monthly payment depends on the loan amount, interest rate, and loan term. Property tax and insurance are added on top.
How to lower your payment
A larger down payment, shorter loan term, or lower interest rate all reduce your monthly payment and total interest paid.
20% down payment
Putting 20% down avoids Private Mortgage Insurance (PMI), which can add $50–200/month to your payment. See our down payment guide for the full breakdown.
What is amortization?
Amortization is how your loan is paid off over time. Early payments are mostly interest — later payments are mostly principal.
Understanding your mortgage payment — the real numbers
Most people focus on the monthly payment number, but the more important figure is how much of that payment actually goes toward owning your home. In the early years of a 30-year mortgage, the split is dramatic: at a 7% interest rate, roughly 82% of your first payment is pure interest. You are essentially renting money from the bank.
This is why the loan term choice matters so much. Here is what actually happens to your money across common loan scenarios:
| Loan term | Monthly payment | Total interest paid | Total cost |
|---|---|---|---|
| 30 years at 7% | $1,996 | $418,527 | $718,527 |
| 20 years at 7% | $2,326 | $258,147 | $558,147 |
| 15 years at 6.5% | $2,614 | $170,433 | $470,433 |
| 10 years at 6.5% | $3,407 | $108,761 | $408,761 |
Choosing a 15-year mortgage over a 30-year mortgage on a $300,000 loan saves over $248,000 in interest — nearly the original loan amount again. The monthly payment is $618 higher, but the lifetime cost is dramatically lower.
The down payment decision — more complex than it looks
The conventional wisdom is "put down 20% to avoid PMI." That is true, but it is not the whole picture. Here is exactly how down payment size changes the numbers on a $400,000 home purchase. For a deeper look at whether 3%, 10%, or 20% is right for your situation, see our guide to how much to put down on a house.
| Down payment | Loan amount | Monthly P&I | PMI added |
|---|---|---|---|
| 5% ($20,000) | $380,000 | $2,529 | +$158/mo |
| 10% ($40,000) | $360,000 | $2,396 | +$120/mo |
| 20% ($80,000) | $320,000 | $2,129 | None ✓ |
| 25% ($100,000) | $300,000 | $1,996 | None ✓ |
PMI typically costs 0.5%–1.5% of the loan amount annually. On a $380,000 loan that is $158–$475 per month — a real cost, but one that disappears once you reach 20% equity. If you're buying for the first time, our first-time homebuyer guide walks through the full process from credit score to closing day.
30-year vs 15-year mortgage — which is actually better?
The answer depends almost entirely on what you would do with the payment difference.
Choose 30-year if you will:
- Invest the payment difference consistently
- Value cash flow flexibility
- Have a variable income
- Plan to move within 7-10 years
- Be in a high tax bracket
Choose 15-year if you will:
- Not invest the difference reliably
- Prioritize being debt-free
- Have stable, predictable income
- Stay in the home long-term
- Be approaching retirement
Already have a mortgage and wondering if today's rates make refinancing worthwhile? Read Should I Refinance My Mortgage? for the full break-even breakdown, or jump straight to the Refinance Calculator to see your personal numbers. And if you're juggling a mortgage alongside other debts, the Debt Payoff Calculator can help you see the full picture.
The formula behind this calculator
This calculator uses the standard fixed-rate amortization formula used by lenders worldwide:
M = P x [r(1+r)n] / [(1+r)n - 1]
Where M is the monthly payment, P is the loan principal, r is the monthly interest rate (annual rate divided by 12), and n is the number of payments (years x 12). Property tax and insurance are added on top. Every lender uses this same formula, so the payment you see here will match what any lender calculates for the same inputs.
Common mistakes people make with their mortgage payment
Comparing only the headline rate. Two loans at the same rate can cost very differently once origination fees and points are included. Compare APR, not just the rate.
Forgetting property tax and insurance. A “principal and interest” quote isn’t your real payment — taxes and homeowners insurance can add hundreds of dollars a month and vary a lot by location.
Budgeting off gross income. Lenders qualify you using pre-tax income, but you pay your mortgage from take-home pay. Re-run the numbers against what actually lands in your account.
Ignoring PMI under 20% down. Below 20% down, PMI gets added to your payment until you reach 20% equity — a real, recurring cost that's easy to leave out when comparing down payment scenarios.
Assuming the advertised rate is your rate. Online rates assume excellent credit and specific terms. Your actual rate depends on your credit score, loan type, and lender — get a real quote before treating any number as final.
Protect your new home from costly repairs
A home warranty covers major systems and appliances — HVAC, water heater, electrical, plumbing — when they break. Get a free quote in minutes.
Get a Free Home Warranty Quote →Common questions
How do I calculate my mortgage payment?
Enter your home price, down payment, interest rate, and loan term above. The calculator instantly shows your monthly payment, total interest, and a full amortization schedule.
What is included in a mortgage payment?
A typical mortgage payment includes principal, interest, property taxes, and home insurance — often called PITI. Some loans also include PMI if your down payment is less than 20%.
How much house can I afford?
A common rule is to spend no more than 28% of your gross monthly income on housing costs. Use the House Affordability Calculator to find your exact price range based on your income, debts, and down payment.
Is a 15-year or 30-year mortgage better?
A 15-year mortgage has higher monthly payments but you pay far less interest overall. A 30-year mortgage has lower payments and more flexibility. Use the loan term dropdown above to compare both options instantly.
What is an amortization schedule?
An amortization schedule shows exactly how much of each payment goes to principal and interest over the life of your loan. In the early years, most of your payment goes to interest. Over time, more goes to principal.
How does my down payment affect my mortgage?
A larger down payment reduces your loan amount, which lowers your monthly payment and total interest. It also helps you avoid PMI if you put down at least 20%. See our down payment guide for a full cost comparison at different down payment levels.