Mortgage Calculator

How to use this calculator

Here’s how to use our mortgage calculator to estimate your potential monthly payments on a fixed-rate mortgage:

1. Enter your home price. Input the price of the home you’re buying (or the current value of your home if you’re refinancing).
2. Enter your down payment. Input the amount of your down payment. You can enter either a dollar amount or a percentage.
3. Enter your loan term. Select the length of your loan — it's usually 30 years, but it could also be 20, 15 or 10.
4. Enter your interest rate. Input the mortgage rate you expect to pay. If you’ve already gotten preapproved, that rate may be the most accurate way to estimate your payments. Otherwise, you can use the current average mortgage rate: 6.05%.
5. Click “Update.”

Bankrate's calculator also includes rough estimates of property taxes, homeowners insurance and homeowners association fees, but keep in mind that these figures vary widely by location. You can edit these amounts, or even edit them to zero, as you're shopping for a loan.

Factors that affect your mortgage payment

Understanding what drives your total monthly mortgage payment is the first step toward confident homeownership. Our calculator simplifies complex financial variables to help you visualize your future budget, but those results depend on a few critical levers:

• Home price & down payment: These two figures determine your total loan principal. A larger down payment not only lowers your monthly obligation but can also help you avoid the added cost of private mortgage insurance (PMI), which is required for most loans if your down payment is less than 20%.
• Interest rate: This is the cost of borrowing money. Even a minor fluctuation in your rate can result in tens of thousands of dollars in interest savings (or costs) over the life of the loan.
• Loan term: The duration of your loan (typically 15 or 30 years) dictates your repayment pace. A shorter term means higher monthly payments but significantly less interest paid overall.

How we calculate your results

To provide a transparent estimate, our calculator uses a standard amortization formula. This logic ensures your principal and interest are spread evenly across the duration of the loan so your base payment remains predictable.

Beyond the loan itself, our tool incorporates other regular costs to produce a "real-world" number.

• Property taxes:  Local governments charge an annual tax based on your home’s assessed value to fund public services like schools and infrastructure. Our calculator estimates the monthly cost based on national averages, though your actual rate will depend on your specific municipality and any available exemptions.
• Homeowners insurance: Lenders typically require you to carry a policy that protects your home and belongings against fire, theft and natural disasters. Including this cost in your calculation provides a more accurate picture of your "PITI" (principal, interest, taxes, and insurance) payment, which lenders use to determine your eligibility.
• HOA fees: If you’re considering a condo or planned community, these optional inputs help ensure your housing debt-to-income ratio remains accurate. (HOA dues don’t factor into your overall DTI, but lenders often consider the percentage of your income that would go to housing-related expenses, including HOA fees.)
• PMI: If you make a down payment of less than 20%, your lender is likely to require that you pay for private mortgage insurance. The amount you pay depends on your loan type, credit score and whether you have a fixed- or adjustable-rate loan, but generally, PMI costs an average of 0.46% to 1.50% of your loan amount annually. (Divide that figure by 12 to estimate your monthly cost.)

Mortgage calculator formula

For the mathematically inclined, here's a formula to help you calculate mortgage payments manually:

M = P · [ r(1 + r)ⁿ / ((1 + r)ⁿ − 1) ]

Understanding your results

Once you hit "Update," the numbers on the screen represent more than just a monthly bill — they are a snapshot of your future financial flexibility. Interpreting these results correctly helps you move from "Can I afford this?" to "Is this the right move for me?"

Your results are typically divided into three core areas:

• Principal and interest: This is your base cost. In the early years of your mortgage, a large percentage of this payment goes toward interest. Over time, the balance shifts, and more of your payment goes toward reducing the principal and building your home equity.
• Total cost of the loan: Found in the Amortization tab of the output, this figure is perhaps the most eye-opening. It represents the sum of all payments over the life of the mortgage and reveals the true price of the house, after decades of interest are factored in.
• Payoff date: This provides a concrete timeline for when you will own your home free and clear.

To get the most out of this tool, run a few "what-if" scenarios to understand the immediate implications:

• Rate hikes: See how a 0.5% increase in interest rates affects your purchasing power. You might find that a small rate change forces you to look at homes $20,000 cheaper to keep the same monthly payment that fits your budget.
• Extra payments: If your results show a total interest cost that feels too high, try adding a small amount to the "Additional amount to monthly payment" field. Even an extra $100 a month can shave years off your payoff date and save you a small fortune in interest.
• Timing the market: Waiting for lower interest rates can be counterproductive if home prices continue to climb in the interim, potentially offsetting any monthly savings with a higher total loan balance. Experts generally recommend that buyers “date the rate and marry the house," suggesting that you should prioritize finding the right property at a price you can afford today. If rates drop later, you maintain the flexibility to refinance, but you can’t retroactively change the purchase price of your home.

By analyzing these results through the lens of your personal budget, you can determine whether a specific home price is a comfortable fit or a financial stretch.

How much house can you afford? 

If you're not sure how much of your income should go toward housing, it might help to start with the 28/36 rule, which dictates you spend no more than 28% of your gross income on housing costs and no more than 36% of your gross income on overall debt, including housing costs. 

Let’s say that Joe makes $60,000 a year. That's a gross monthly income of $5,000, and 28% of that equals $1,400. If Joe were to abide by the 28/36 rule, he’d spend no more than $1,400 on a mortgage payment each month, including homeowners and mortgage insurance premiums.

But meeting the 28/36 rule isn’t always doable or desirable, especially if your budget can’t comfortably accommodate that payment.

“Many prospective homeowners are tempted to stretch when buying a home, since it can literally be the culmination of a dream,” says Mark Hamrick, Bankrate senior economic analyst. "At the same time, given that this is one of the most expensive and consequential purchases of a lifetime, the transaction needs to co-exist with our many other financial goals, including saving for retirement, saving for emergencies and paying down debt. If it turns out that income rises down the road, that presents an opportunity to sock money away to pay for repairs, maintenance and renovations later.”

What to consider next

Once the numbers are in front of you, the transition from calculating to closing depends on how those results align with your broader financial life. Your next steps should be dictated by which zone your results fall into. If the payment feels comfortable, your next move is to verify your debt-to-income (DTI) ratio. Even if a payment fits your monthly budget, a lender may reject your application if your total monthly debt obligations exceed 36% to 43% of your pre-tax income.

If the payment feels like a stretch, consider taking it for a financial test drive. For three months, put the difference between your current rent and this projected mortgage payment into a savings account. If you can live comfortably without that cash, the house is likely a feasible long-term commitment; if not, you may want to adjust your target home price or wait to build a larger down payment.

Before you reach out to a lender, reflect on these three key factors:

1. How long you plan to live in the home: If you plan to move in five years, a lower-rate adjustable-rate mortgage (ARM) might be more strategic than a 30-year fixed-rate loan because the introductory rate on an ARM is often lower than what you can receive on a fixed-rate loan.
2. Your total housing budget: Remember that your mortgage payment isn’t the only cost associated with owning a home. Be sure that you’ve accounted for the hidden costs of homeownership, like maintenance, utilities, insurance and savings for unexpected repairs.
3. Your credit readiness: Could a few months of credit repair or debt payoff drop your interest rate enough to save you a significant amount? Start by checking your credit scores and assessing your total amount of debt.

Related calculators and resources

• Debt-to-income (DTI) ratio calculator: Add up your monthly debt expenses and compare them to your monthly gross income. Ideally, you’ll want a DTI of 36% or below.
• Refinance calculator: If you’re not buying and just need to run the numbers to determine whether refinancing makes sense, this tool can help.
• Get a mortgage prequalification or preapproval: Before shopping for a home, you’ll need to get preapproved.
• Compare mortgage offers: Check out what rates top mortgage lenders are offering today.