Mortgage Calculator
Calculate monthly payments, total interest paid, and preview your loan amortization schedule.
M = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1]
P = Principal, r = monthly rate, n = total payments
Understanding Your Mortgage Calculation
A mortgage payment consists of two primary components: principal (repaying the money borrowed) and interest (the lender's fee for the loan). As you make monthly payments across your loan tenure, the portion going toward interest decreases while the principal repayment increases.
The Monthly Mortgage Payment Formula
M = P · [r(1 + r)ⁿ] / [(1 + r)ⁿ − 1]
- M: Total monthly mortgage payment (Principal + Interest)
- P: Principal loan amount (Home Price − Down Payment)
- r: Monthly interest rate (Annual Rate / 12 / 100)
- n: Total number of monthly payments (Loan Term in Years × 12)
Step-by-Step Mortgage Calculation Example
Suppose you purchase a home for ₹50,00,000 with a down payment of ₹10,00,000 (loan principal ₹40,00,000) at an annual interest rate of 8.5% over 20 years (240 months):
- Calculate monthly rate:
r = 8.5 / 12 / 100 = 0.007083 - Calculate
(1 + r)²⁴⁰ = 5.4095 - Multiply numerator:
40,00,000 × 0.007083 × 5.4095 = 1,53,222.18 - Divide by denominator
(5.4095 − 1) = 4.4095 - Monthly EMI = ₹34,713 (Total repayment = ₹83,31,120, Total interest = ₹43,31,120)
Frequently Asked Questions
What is included in this mortgage calculation?
This tool calculates the core Principal & Interest (P&I) payments and produces an amortization schedule. Property taxes, homeowners insurance, and PMI are determined by local tax jurisdictions and lender policies.
How does a down payment lower my monthly loan payment?
A larger down payment directly reduces the principal loan amount (P). Because interest is computed on the remaining balance, every extra dollar paid upfront reduces both the monthly payment and total lifetime interest.