Practical guide
How to calculate your monthly mortgage payment
Understand the principal-and-interest formula, then account for the other recurring costs of owning a home.
1. Find the loan amount
Start with the home price and subtract your down payment. For example, a $350,000 home with a $70,000 down payment has a starting loan amount of $280,000, before financed fees or other adjustments.
2. Understand principal and interest
For a fixed-rate loan, the monthly principal-and-interest payment is calculated from the loan amount, monthly interest rate and number of monthly payments. A longer term generally lowers the scheduled payment but can increase the total interest paid over the life of the loan.
3. Add the other monthly housing costs
A mortgage payment estimate may also need property taxes, homeowners insurance, mortgage insurance when applicable, and HOA or condominium fees. Utilities and maintenance are separate household expenses and should be budgeted separately.
4. Compare scenarios carefully
Change one input at a time—such as down payment, interest rate or loan term—to see how the estimate changes. These results are planning estimates, not a lender offer. Actual costs depend on underwriting, local taxes, insurance quotes and loan terms.
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Frequently asked questions
What determines a monthly mortgage payment?
The loan amount, interest rate and term determine principal and interest. Taxes, insurance, mortgage insurance and HOA fees can increase monthly housing costs. Results are estimates, not lender offers.