How this mortgage calculator works
A mortgage payment is four bills disguised as one. Lenders call it PITI: principal, interest, taxes and insurance. The principal and interest come from the standard amortization formula — the same one every bank in the country uses — while taxes and insurance are usually collected monthly and held in an escrow account. This calculator combines all four so the number you see is close to the number that will actually leave your checking account.
Two inputs move the result far more than the others: the interest rate and the loan term. A single percentage point on a $280,000 loan changes the monthly payment by roughly $180 — and the lifetime interest by more than $60,000. That is why comparing at least three lender quotes is the highest-paid hour of the entire home-buying process.
On a 30-year mortgage at today's rates, you will pay nearly as much in interest as you borrowed in the first place.The Ledger — run the numbers above
15-year vs. 30-year: the trade-off in one table
Example: $280,000 loan (a $350,000 home with 20% down) at typical 2026 rates.
| Term | Rate | Monthly P&I | Total interest |
|---|---|---|---|
| 30 years | 6.50% | $1,770 | ~$357,000 |
| 15 years | 5.90% | $2,348 | ~$143,000 |
The 15-year loan costs about $578 more per month but saves over $200,000 in interest. Neither answer is universally right: the 30-year term buys flexibility (you can always pay extra), the 15-year term buys discipline and a lower rate. Try both terms in the calculator with your own numbers.
The 28/36 rule of thumb
Most lenders — and most sensible budgets — follow the 28/36 rule: your housing payment should stay under 28% of gross monthly income, and all debt payments combined under 36%. If the calculator's result breaks either limit, the honest options are a bigger down payment, a cheaper house, or waiting while you improve your credit score to qualify for a better rate.
Carrying credit card debt while saving for a house? See how fast you could clear it with the credit card payoff calculator — a lower balance also improves the debt-to-income ratio lenders check.