How to Calculate a Mortgage Payment
Work through mortgage principal, interest, taxes, insurance and other recurring housing expenses.
Principal and interest are only the beginning
A fixed-rate mortgage payment depends on the amount borrowed, annual interest rate and term. A widely used formula is M = P×r / (1 − (1+r)^−n), where r is monthly interest and n is the number of monthly payments.
For a $300,000 loan at 6% nominal APR over 30 years, monthly principal and interest are about $1,798.65. The borrower may still owe property tax, homeowners insurance, HOA charges and mortgage insurance.
How amortization changes the payment breakdown
In the first month, interest is calculated on the largest outstanding balance. Each subsequent payment gradually lowers that balance, causing less interest to accrue if the loan is paid as scheduled.
An amortization table makes this progression visible, but your total monthly housing budget should also include non-loan costs.
How to use the result
Enter a realistic home price and down payment, then adjust taxes and insurance separately. The calculator produces a planning estimate, not a lender quote or approval decision.
- Model multiple APRs.
- Include expected closing costs and savings reserves.
- Consider future changes in taxes, insurance and maintenance.
Further reading and primary sources
These external references explain related financial concepts and rules. They do not verify your personal calculation.