Mortgage Calculator

Mortgage Calculator – Estimate Monthly Payments & Home Loan Costs

The Mortgage Calculator helps estimate your monthly mortgage payment along with other costs associated with home ownership. It allows you to include extra payments, property taxes, insurance, and annual increases to provide a more realistic estimate. This calculator is mainly intended for use by U.S. residents.

What Is a Mortgage?

A mortgage is a loan secured by property, usually real estate. The lender pays the seller on behalf of the buyer, and the buyer agrees to repay the loan over a fixed period, commonly 15 or 30 years in the United States.

Each monthly payment includes two main parts: principal (the amount borrowed) and interest (the cost of borrowing). Until the final payment is made, the lender retains a legal claim on the property.

Mortgage Calculator Components

• Loan Amount: Purchase price minus the down payment
• Down Payment: Upfront payment, typically 3%–20%
• Loan Term: Commonly 15, 20, or 30 years
• Interest Rate: Cost of borrowing, usually expressed as APR

Fixed-rate mortgages maintain the same interest rate throughout the loan, while adjustable-rate mortgages (ARMs) change over time based on market conditions.

Costs Associated With Home Ownership

Monthly mortgage payments are the largest expense, but homeowners must also consider additional recurring and non-recurring costs.

Recurring Costs

• Property Taxes: Average around 1.1% of property value per year in the U.S.
• Home Insurance: Protects against damage and liability
• PMI: Required when down payment is below 20%
• HOA Fees: Common in condos and planned communities
• Maintenance: Often 1% or more of home value annually

Non-Recurring Costs

• Closing Costs: Legal, appraisal, and administrative fees
• Initial Renovations: Optional upgrades before moving in
• Miscellaneous: Furniture, appliances, moving costs

Early Repayment & Extra Payments

Borrowers often choose to pay extra toward their mortgage to reduce interest and shorten the loan term. Common strategies include extra monthly payments, biweekly payments, or refinancing to a shorter term.

Pros & Cons of Paying Off a Mortgage Early

• Pros: Lower interest, faster payoff, peace of mind
• Cons: Opportunity cost, reduced liquidity, possible penalties

Brief History of Mortgages in the U.S.

Early U.S. mortgages required large down payments and short loan terms. Government-backed programs like FHA and Fannie Mae introduced long-term, affordable mortgages in the 1930s, greatly expanding homeownership.

Today, 30-year fixed-rate mortgages remain the most common home loan option in the U.S.