A mortgage is a long-term loan used to buy real estate, paid back monthly over 15–30 years at a fixed or variable interest rate. This calculator computes your exact monthly payment, amortization schedule, and total interest cost — the same calculation your lender uses to determine your annual percentage rate (APR) at closing.
Mortgage Payoff Calculator
Calculate your exact monthly payment, total interest, and payoff date. Model extra payments to see how you can save thousands of dollars in interest.
How Your Monthly Mortgage Payment Is Calculated
Your mortgage payment uses the standard amortization formula — the same model required by the Truth in Lending Act (TILA) for all residential mortgage disclosures in the U.S. Your payment covers principal, interest, property taxes, insurance, and HOA fees (PITI/PITIA) across equal monthly installments, with interest front-loaded in early years.
| Variable | Definition |
|---|---|
| M | Monthly payment (principal + interest only; taxes & insurance added separately) |
| P | Principal — the loan amount after down payment |
| r | Monthly interest rate = Annual rate ÷ 12 |
| n | Total number of monthly payments (loan term in months) |
Example: A $300,000 loan at 6.8% APR for 30 years (360 months) produces a monthly principal & interest payment of $2,010. Add property taxes (~$250/month) and homeowners insurance (~$150/month), and your total PITI is ~$2,410/month. This exact calculation appears in your Loan Estimate document provided by your lender.
⚠️ Expert Pro-Tip
Don't Get Seduced by 30-Year Terms — The 15-Year Sweet Spot: A 30-year mortgage at 6.8% on $300,000 costs $724,560 total interest. The same loan at 15 years costs only $180,000 in interest — you save $544,000. But your monthly payment jumps from $2,010 to $3,056. Most borrowers can't swing the extra $1,046/month, so they lock into 30 years. The real move: get a 30-year mortgage, then pay like it's a 20-year by adding $300–500/month when you can. You get flexibility if cash flow tightens, but accelerate payoff without the payment shock of a true 15-year note.
Frequently Asked Questions: Mortgages in 2026
What's the current average mortgage rate in 2026?
As of April 2026, the average 30-year fixed mortgage rate is approximately 6.8% for conforming loans (up to $766,550). Rates vary by credit score, down payment, and loan type. FHA loans (3.5% down) average 7.2%, VA loans (0% down) average 6.5%, and jumbo mortgages (over $766,550) average 7.1%. Rates have been rising as the Fed combats inflation; lock in when rates dip.
Is now a good time to buy or refinance?
Refinancing makes sense if rates drop 0.5%–1.0% below your current rate and you plan to stay in the home 3+ years (to recoup closing costs). In April 2026, refinancing a 7.5% mortgage to 6.8% saves ~$100/month on a $300,000 loan. For purchases: if you can afford 20% down and a 15-year mortgage, buy. If you need PMI or a 30-year term, wait for rates to drop below 6%.
How much house can I afford?
Lenders typically cap your housing payment at 28% of gross monthly income and total debt at 43% of gross income. On $100,000/year income (~$8,333/month), your max housing payment is $2,333/month. At 6.8% rates, that supports a ~$350,000 mortgage. But a healthier rule: your total housing payment (PITI) should not exceed 20% of take-home pay. On $100k gross (~$70k take-home), that's $1,400/month max — supporting ~$250,000 at 6.8%.
What's the advantage of a 15-year mortgage over 30-year?
15-year mortgages have rates ~0.4% lower than 30-year (e.g., 6.4% vs 6.8%) and save massive interest: $544,000 vs $724,560 on a $300,000 loan. You build equity 2x faster and own your home debt-free by retirement. Downside: monthly payment is 1.5x higher ($3,056 vs $2,010). Only choose 15-year if you can comfortably afford the higher payment without sacrificing retirement savings or emergency funds.
Should I pay down my mortgage faster, or invest the extra cash?
If you can earn more than your mortgage rate (6.8%) in the stock market (historical average: 10%), invest instead. But psychologically, paying down debt is powerful — you sleep better with lower debt. Hybrid approach: put 50% of extra cash toward mortgage principal, 50% into a Roth IRA. At 6.8% mortgage rates, you're likely better off investing, but the psychological value of debt payoff has real worth.
What does PMI cost and when does it go away?
Private Mortgage Insurance (PMI) protects the lender if you put down less than 20%. It costs 0.5%–1.5% of the loan amount annually, paid as part of your monthly payment. On a $300,000 mortgage with 10% down, PMI adds ~$150–250/month. PMI automatically drops at 78% loan-to-value (LTV), but only if you've made on-time payments. You can request removal at 80% LTV. To avoid PMI: save 20% down or use an 80/10/10 strategy (80% first mortgage, 10% second mortgage, 10% down payment).