How this mortgage calculator works
Your monthly principal-and-interest payment is computed with the standard amortization formula: P × r ÷ (1 − (1 + r)−n), where P is the loan amount (home price minus down payment), r is the monthly interest rate, and n is the number of payments. On top of that, the calculator adds one-twelfth of your annual property taxes and homeowners insurance, monthly HOA dues, and PMI when your down payment is under 20% — giving you the true PITI payment a lender will quote.
Worked example
A $400,000 home with 20% down ($80,000) leaves a $320,000 loan. At 6.5% over 30 years, the P&I payment is about $2,023 per month. Add $400/month in taxes and $133/month in insurance and the full payment is roughly $2,556. Over the life of the loan you would pay about $408,000 in interest — more than the original loan amount — which is exactly why the extra-payment section matters.
Why extra payments are powerful
Every extra dollar of principal stops accruing interest immediately. An extra $200/month on the example loan above saves over $70,000 in interest and pays the loan off years early. Use the extra-payment inputs to compare monthly, annual, and one-time lump-sum strategies against your baseline schedule — the calculator shows interest saved and time shaved side by side.
Financing an investment property or structuring an owner-financed deal instead? Try the investment calculator with DSCR and cash-on-cash analysis, or the seller financing calculator.