How to Use This Mortgage Calculator
Our mortgage calculator helps you understand exactly what your monthly payment will be — and more importantly, how much of that payment goes toward interest over the life of the loan.
What Each Input Means
- Home Price — The total purchase price of the property.
- Down Payment — Your upfront cash payment. A 20% down payment ($80,000 on a $400,000 home) lets you avoid PMI (private mortgage insurance).
- Interest Rate — The annual rate on your loan. A 1% difference can mean tens of thousands in extra interest over 30 years.
- Extra Payment — Adding even $100/month extra can shave years off your loan and save thousands in interest.
Example: $400,000 Home with 20% Down
With a 30-year fixed mortgage at 6.5%, your monthly principal and interest payment is approximately $2,022. Over 30 years, you will pay about $408,000 in interest — more than the original loan amount.
But add just $200/month extra, and you will pay off the loan 6 years early and save over $100,000 in interest.
Should You Pay Extra on Your Mortgage?
This depends on your interest rate. If your mortgage rate is higher than what you could earn by investing (say, in an index fund averaging 7-10% annually), paying extra on the mortgage makes mathematical sense. If your rate is low (under 4%), you may be better off investing the extra cash instead.
Our calculator lets you model both scenarios — try different extra payment amounts and see the impact for yourself.