Mortgage Calculator Methodology

For a fixed-rate mortgage with a positive interest rate, the principal-and-interest payment is estimated using the standard amortizing loan-payment formula:

The monthly rate is calculated by dividing the annual interest rate by 12. The number of monthly payments is generally the selected loan term in years multiplied by 12.

If the interest rate entered is zero, the standard amortization formula would require division by zero. In that situation, the calculator estimates principal and interest by dividing the loan amount evenly across the number of monthly payments.

The estimated starting loan amount is calculated as:

Users may enter the down payment as either a dollar amount or percentage of the home price.

For the basic fixed-rate calculation, estimated total interest over the full loan term is calculated as:

This assumes the scheduled monthly principal-and-interest payment is made for the full term without refinancing, early payoff, missed payments, or additional principal payments.

When annual property taxes are included, the calculator converts the annual amount into a monthly estimate:

Actual tax bills vary by jurisdiction, assessed value, exemptions, property characteristics, and changes in tax rates.

When an annual homeowners insurance estimate is included, the calculator divides the annual amount by 12 to estimate a monthly cost.

Actual premiums depend on the insurer, property, coverage limits, deductible, location, claims history, and other underwriting factors.

When the optional housing-cost inputs are enabled, the calculator may estimate PMI when the down payment is less than 20% of the home price.

The simplified PMI estimate uses the outstanding starting loan amount and the annual PMI percentage entered by the user:

Actual mortgage insurance requirements and premiums can differ by lender, loan program, credit profile, loan-to-value ratio, and other factors.

HOA dues entered as a monthly amount are added directly to the estimated monthly housing cost. HOA dues are not part of the mortgage principal-and-interest payment and may be billed separately.

When optional housing costs are enabled, the calculator combines the selected costs approximately as follows:

The interest rate entered into the calculator is an assumption chosen by the user. It is not a live lender quote.

The Site may separately display current mortgage offers or rate information supplied by third parties. Those offers can use their own assumptions, pricing, eligibility requirements, APR calculations, points, fees, and qualification criteria.

Calculator values may be rounded for display. Internal calculations may use greater precision than the rounded dollar amounts or percentages visible on the page.

As a result, manually recomputing displayed rounded values may produce a small difference from the calculator output.

MortgageCalculator.is provides estimates for education, planning, and scenario comparison. Results may differ from lender disclosures due to changing market rates, lender-specific calculations, credit profile, property details, escrow requirements, closing costs, loan-program rules, rounding, timing, and other factors.

The calculator does not determine whether you qualify for a loan and does not provide a commitment to lend.

If you believe a calculation is incorrect or want clarification about an assumption, please use our Contact Us page.