Loan & Mortgage Calculator
Calculate your monthly payments, total interest, and discover how extra payments can save you thousands.
Master Your Mortgage & Save Thousands
Understanding Mortgage Basics
Principal: The amount you borrow (home price minus down payment)
Interest: The cost of borrowing money, expressed as an annual percentage
Amortization: How your payment is split between principal and interest over time
Key Insight: Early payments are mostly interest. A $2,000 payment might only reduce principal by $500 in year 1, but $1,800 in year 29.
Common Loan Types
30-Year Fixed Mortgage
Most popular. Predictable payments, but highest total interest.
Best for: Long-term stability, lower monthly payments
15-Year Fixed Mortgage
Higher payments, but save 50-60% on total interest.
Best for: Aggressive savers, higher income earners
ARM (Adjustable Rate)
Lower initial rate that adjusts after fixed period.
Best for: Short-term owners, risk-tolerant borrowers
True Monthly Cost (PITI + HOA)
P - Principal & Interest: Your actual loan payment
T - Property Taxes: Usually 1-2% of home value annually
I - Insurance: Homeowners insurance (required by lenders)
PMI: Required if down payment < 20% (adds $100-300/month)
HOA: Homeowners association fees if applicable
Reality Check: A $2,000 mortgage payment often means $2,800+ total monthly cost.
Strategies to Save Thousands
1. Extra Principal Payments
Even $100/month extra can save $50,000+ and cut 5-7 years off a 30-year mortgage.
2. Bi-Weekly Payments
Pay half your mortgage every 2 weeks = 13 full payments per year instead of 12.
3. Refinance Strategically
If rates drop 0.75%+, refinancing usually makes sense (consider closing costs).
4. Round Up Payments
Round $1,847 to $1,900 or $2,000. Small change, big impact over time.
Avoid These Costly Mistakes
- ❌ Only considering monthly payment (ignoring total interest)
- ❌ Not shopping multiple lenders (rates vary by 0.5-1%+)
- ❌ Forgetting to budget for maintenance (1-3% of home value annually)
- ❌ Taking cash-out refinances for consumption
- ❌ Not understanding prepayment penalties
Your Mortgage Action Plan
- Use the calculator to understand your true costs
- Compare 15 vs 30-year options
- Calculate impact of extra payments
- Shop at least 3 lenders for best rate
- Get pre-approved before house hunting
- Keep credit score above 740 for best rates