What This Calculator Does

Buying a home usually means committing to a payment you'll be making for decades, so it helps to see the real shape of that commitment before you sign anything. This tool turns a loan amount, interest rate, and term into a monthly Principal & Interest payment, then builds out the full month-by-month amortization schedule behind it — how much of each payment chips away at the balance versus how much is pure interest. You can also layer in an extra monthly payment to see how much faster the loan clears and how much interest that saves, and optionally add annual property tax and home insurance to get a realistic all-in monthly figure.

How to Use It

Fill in the loan amount, annual interest rate, and loan term in years — the fields arrive pre-filled with example values so you can see a live result immediately. Extra Monthly Payment, Annual Property Tax, and Annual Home Insurance are all optional: leave them at zero if you just want a bare Principal & Interest figure. The Payment Summary panel gives you the headline numbers — monthly payment, total interest, payoff time — and the Amortization Schedule table below it lets you scroll through the loan month by month to watch the balance decline.

The Formula

The monthly payment comes from the standard fixed-rate amortization formula, M = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1], where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments (term in years × 12). From there, the calculator walks the loan month by month: each month's interest is the current balance times the monthly rate, rounded to the cent, and the principal portion is whatever's left of that month's payment (plus any extra payment) after interest is covered.

One rounding detail worth knowing: because interest is rounded to the cent every month, small fractions of a cent can accumulate over hundreds of payments. Rather than let that drift show up as an odd number on the very last row, each row's displayed principal is derived from the change in the running cumulative principal paid so far — this guarantees the principal column always sums to exactly the loan amount and never goes negative, the same way a real loan servicer's statement would reconcile. Property tax and home insurance, when entered, are simple annual-to-monthly conversions (divide by 12) added on top of the Principal & Interest figure — they're a pass-through and never affect the amortization math itself, since real property tax and insurance aren't part of paying off the loan.

A Worked Example

Take a $200,000 loan at 6% annual interest over 30 years. Plugging those numbers into the formula above gives a monthly Principal & Interest payment of $1,199.10. In the very first month, interest works out to $200,000 × (6% ÷ 12) = $1,000.00 exactly, which leaves $199.10 of that first payment going toward principal. By month 180 — halfway through the term — the balance has fallen enough that interest for that month is only $712.92, so principal jumps to $486.18. Over the full 361-month payoff (a fixed-rate loan like this one typically needs one payment beyond the nominal 360 to clear the last few cents of rounding drift), total interest paid comes to roughly $231,676. Add $3,000 a year in property tax and $1,200 a year in home insurance — $250.00 and $100.00 a month respectively — and the Total Monthly Payment comes to $1,549.10.