📖
Knowledge is Power: Mortgage Buyer's Guide
How should you structure your loan? What's the impact of a down payment? Read 2026 expert strategies.
Read the Full Guide →How to Use the Mortgage Calculator
Enter the home price, your down payment, the annual interest rate, and the loan term. Optionally include annual property taxes and home insurance to get a more complete picture of your total monthly housing cost.
Mortgage Payment Formula
M = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1]
M = monthly payment
P = principal loan amount
r = monthly interest rate (annual rate ÷ 12)
n = number of payments (years × 12)
M = monthly payment
P = principal loan amount
r = monthly interest rate (annual rate ÷ 12)
n = number of payments (years × 12)
How Down Payment Affects Your Mortgage
A larger down payment reduces your loan amount, resulting in lower monthly payments and less total interest paid over the life of the loan. In the US, a down payment of less than 20% typically requires Private Mortgage Insurance (PMI), which adds to your monthly costs.
Fixed Rate vs. Adjustable Rate Mortgages
- Fixed-Rate Mortgage: The interest rate stays the same for the entire loan term. Predictable and stable — great when rates are low.
- Adjustable-Rate Mortgage (ARM): The rate changes periodically after an initial fixed period. Can be lower initially, but risky if rates rise significantly.
Tips to Lower Your Monthly Payment
- Increase your down payment to reduce the loan principal
- Shop around for the best interest rates from multiple lenders
- Opt for a longer loan term (though you'll pay more interest overall)
- Improve your credit score before applying — better scores get better rates
- Consider paying mortgage points to buy down your interest rate