What Is a Simple Mortgage Calculator?
A simple mortgage calculator estimates your fixed monthly payment on a loan with a constant interest rate. It uses the standard amortization formula, which spreads the loan amount plus interest evenly across every month of the term. This tool covers the principal-and-interest portion of a payment — it does not include property taxes, homeowners insurance, or PMI, which vary by location and lender.
How to Use It
Enter three values: the loan amount (the amount you are borrowing after any down payment), the annual interest rate as a percentage, and the loan term in years. The calculator instantly returns your monthly payment, the total interest you will pay over the life of the loan, and the total of all payments combined.
The Formula Explained
The monthly payment is calculated as $$M = P \cdot \frac{r\,(1+r)^{n}}{(1+r)^{n}-1}$$. Here, \(P\) is the principal, \(r\) is the monthly interest rate (the annual rate divided by 12 and converted from a percentage), and \(n\) is the total number of monthly payments (years × 12). If the interest rate is 0%, the payment is simply the principal divided by the number of months.
Worked Example
Suppose you borrow $300,000 at 6.5% annual interest for 30 years. The monthly rate is \(0.065 \div 12 = 0.00541667\), and \(n = 360\) payments. Plugging these into the formula gives a monthly payment of about $1,896.20. Over 30 years you would pay roughly $682,633 in total, of which about $382,633 is interest.
FAQ
Does this include taxes and insurance? No. It only calculates principal and interest. Your actual monthly housing cost may be higher.
Can I use it for any currency? Yes. The math is currency-agnostic; just enter your loan amount in whatever currency you use.
What if my rate is variable? This calculator assumes a fixed rate for the entire term. For adjustable-rate loans, the payment will change when the rate resets.
