Our mortgage calculator offers two modes to help you plan your home purchase. Use the tabs above to switch between them.

When you run a calculation, the results panel displays a complete breakdown of your estimated monthly payment. Here is what each component means and why it matters:

• Principal -- The portion of your payment that reduces the outstanding loan balance. In the early years of a mortgage, a relatively small share of each payment goes toward principal. Over time, as the balance decreases, a larger share of your payment is applied to principal. This gradual shift is called amortization.
• Interest -- The cost your lender charges for lending you the money, calculated as a percentage of the remaining balance each month. Interest makes up the largest portion of your payment in the early years and decreases over time as your balance shrinks.
• Property Taxes -- Local taxes assessed by your county or municipality based on the value of your property. The calculator estimates this using a national average rate of about 1.1% of the home value per year, divided into monthly installments. Your actual rate may vary significantly by location.
• Homeowners Insurance -- A policy that protects your home against damage, theft, and liability. Lenders require this coverage for the duration of the loan. The calculator uses an average annual premium of approximately 0.35% of the home value spread across 12 monthly payments.
• Private Mortgage Insurance (PMI) -- An additional monthly charge required when your down payment is less than 20% of the home price. PMI protects the lender in case of default and typically costs between 0.5% and 1.5% of the loan amount annually. Once you build 20% equity in your home, you can request removal of PMI.

To illustrate how the calculator works, consider a buyer purchasing a $350,000 home with a 20% down payment ($70,000), a 6.5% fixed interest rate, and a 30-year loan term. The loan amount after the down payment is $280,000.

Over the full 30-year term, you would pay approximately $357,200 in interest alone on the $280,000 borrowed -- more than the original loan amount. This is why even a small reduction in your interest rate can yield substantial savings. For instance, if you secured a 6.0% rate instead of 6.5%, your monthly principal and interest payment would drop to about $1,679, saving you roughly $91 per month or nearly $33,000 in total interest over the life of the loan.

If the same buyer chose a 15-year term at 5.9%, the monthly principal and interest payment would increase to approximately $2,352, but the total interest paid would be only about $143,400 -- a savings of more than $213,000 compared to the 30-year option. The trade-off is a higher monthly payment, so the right choice depends on your budget and financial priorities.