What to enter
- Home price: the purchase price used for this estimate.
- Down payment: the amount paid upfront. The calculator subtracts this from the home price to get the principal borrowed.
- Annual interest rate: the stated yearly rate, entered as a percentage such as
6.5. - Loan term: the repayment period in whole years.
How the payment is calculated
For a nonzero rate, the tool uses the standard fixed-payment formula. It converts the annual rate to a monthly rate and the term to a number of monthly payments.
Payment = P × r × (1 + r)n ÷ ((1 + r)n − 1)
Here, P is the principal borrowed, r is the monthly interest rate, and n is the number of monthly payments. If the rate is 0%, the estimate is principal divided by the number of months.
Verified example
With a home price of $400,000, a down payment of $80,000, a 6.5% annual rate, and a 30-year term, the tool uses a principal of $320,000 and returns $2,022.62 as the estimated monthly principal-and-interest payment.
What this estimate does not include
The result does not add property taxes, homeowners insurance, mortgage insurance, homeowners association fees, closing costs, rate changes, extra payments, or lender-specific charges. It is not a loan offer, affordability decision, or payment quote. Compare it with the disclosure and payment estimate supplied by a lender before making a financial decision.