How much house can I afford?

A common guideline is that your monthly mortgage payment should not exceed 28% of your gross monthly income (the "front-end" ratio), and total debt payments should not exceed 36-43% (the "back-end" ratio). On a $75,000 annual salary, that means a monthly mortgage payment of up to $1,750 is generally considered manageable. UK lenders typically allow up to 4-4.5× your gross annual income as the maximum loan amount.

What is the difference between a 15-year and 30-year mortgage?

A 30-year mortgage has lower monthly payments but you pay significantly more interest over the full term. A 15-year mortgage has higher monthly payments but a lower interest rate and you build equity much faster. For example, on a $320,000 loan at 7%, a 30-year mortgage costs about $2,129/month with $446,000 in total interest, while a 15-year costs about $2,876/month but only $197,000 in total interest — saving nearly $250,000.

What is a good interest rate for a mortgage?

In the US, a "good" mortgage rate is generally at or below the national average for your loan type. As of 2024-25, the average 30-year fixed rate is around 6.5–7.5%. Your actual rate depends on your credit score, loan-to-value ratio (LTV), loan type (conventional, FHA, VA), and lender. In the UK, competitive rates on 5-year fixes have ranged from 4% to 5.5% depending on your deposit size and lender.

How much is a 20% down payment on a $400,000 home?

A 20% down payment on a $400,000 home is $80,000, leaving a $320,000 mortgage. Putting 20% down typically avoids private mortgage insurance (PMI) in the US, which can add $100–$200/month to your payment. In the UK, a 40% deposit unlocks the most competitive rates.

Does this calculator include taxes and insurance?

No — this calculator shows principal and interest (P&I) only. In the US, your actual monthly payment to a lender often includes property tax and homeowner's insurance collected in escrow (called PITI — Principal, Interest, Taxes, Insurance). For a complete budget, add estimated annual property taxes (typically 0.5–2% of home value) and insurance ($1,200–$2,000/year) to your monthly P&I payment.

Can I use this for a UK mortgage?

Yes. Switch the currency selector to GBP (£) and enter your property price, deposit amount, interest rate, and term in years. The mortgage calculation formula is the same for UK and US loans. For UK users, remember that stamp duty land tax (SDLT) and solicitor/conveyancing fees are separate upfront costs not included in this calculation.

💰 Finance ⭐ Popular

Mortgage Calculator

Use this free mortgage calculator to find out exactly how much your monthly home loan payment will be — and how much you'll pay in total interest over the life of the loan. Simply enter your home price, down payment, interest rate, and term to get an instant, detailed breakdown.

Last reviewed: January 2026 Formula shown No signup required

Educational estimate. Calculator results are for planning and information only, not financial, tax, medical, legal, or engineering advice. Verify important decisions with official sources or a qualified professional.

Mortgage Calculator

Monthly Payment, Total Cost & Amortization

Home Price

Enter the full purchase price of the property.

Down Payment

Typical down payment is 10–20% of the home price.

Annual Interest Rate

Current US 30-year fixed average is around 6.5–7.5%. UK rates vary by lender.

Loan Term

Years

Common terms are 15 or 30 years in the US; 25 years in the UK.

📐 Formula & Method

Monthly Mortgage Payment (M)

M = P × r(1+r)ⁿ / [(1+r)ⁿ − 1]

Where P = loan principal (home price minus down payment), r = monthly interest rate (annual rate ÷ 12 ÷ 100), n = total number of monthly payments (loan term × 12).

Total Cost & Interest

Total Paid = M × n | Total Interest = Total Paid − P

Multiplying the monthly payment by the number of payments gives your total cost. Subtract the principal to find total interest paid over the life of the loan.

📋 How to Use

1
Enter the full home purchase price.
2
Enter your down payment amount (the portion you are paying upfront, not financing).
3
Enter the annual interest rate from your lender or mortgage quote.
4
Enter your desired loan term in years (15, 20, or 30 years are most common).
5
Click Calculate to see your monthly payment, total interest, and total cost.
6
Use the currency selector to switch between USD ($) and GBP (£) or another currency.

💡 Key Insights

Rate moves matter more than price negotiations: a 1% rate drop on a $400k loan saves roughly $90k in interest over 30 years — usually more than you can negotiate off the sticker price.
A 15-year mortgage cuts total interest by 60–70% versus a 30-year, but raises the monthly payment by about 35–45% — only pick it if you can comfortably afford the higher payment without sacrificing retirement contributions.
A 20% down payment removes US private mortgage insurance (PMI) — typically $100–$300/month on a $400k home. That alone is a 5–8% pre-tax annual return on the marginal down payment.
In the UK, lenders cap most mortgages at 4.5× your gross income, so a £55,000 salary maps to roughly a £247,500 maximum loan — independent of how much you can technically afford monthly.
Mortgage payments are heavily front-loaded with interest. In year 1 of a 30-year loan at 7%, about 83% of every payment is interest. By year 20 that flips to about 30% interest, 70% principal.

🧮 Worked Examples

Example 1 — Standard US 30-year fixed

A buyer purchases a $450,000 home with 20% down at 7% for 30 years.

Home price$450,000

Down payment$90,000 (20%)

Rate7.0%

Term30 years

Result: Monthly P&I ≈ $2,395 · Total paid ≈ $862,217 · Total interest ≈ $502,217.

Example 2 — UK 25-year repayment

A first-time buyer purchases a £320,000 home with a 10% deposit at 4.8% for 25 years.

Home price£320,000

Deposit£32,000 (10%)

Rate4.8%

Term25 years

Result: Monthly payment ≈ £1,649 · Total paid ≈ £494,797 · Total interest ≈ £206,797.

📊 How to Interpret Your Result

✅

Monthly payment under 28% of gross monthly income

Comfortable affordability. Front-end DTI is within the conservative band US lenders prefer for prime-rate offers.

⚡

Monthly payment 28–36% of gross income

Tight but workable if other debts are minimal. Expect lenders to scrutinise your back-end DTI, savings, and credit score.

⚠️

Monthly payment above 36% of gross income

High risk of being house-poor. Consider a smaller home, larger down payment, or longer term to reduce the monthly figure.

⚠️ Common Mistakes to Avoid

Forgetting taxes, insurance, and HOA (or service charge) when budgeting.

Fix: Add about 1–2% of the home value annually for property tax and $1,200–$2,400/yr for insurance. In the UK include service charge and ground rent on leaseholds.

Using the gross loan amount instead of net proceeds when comparing offers.

Fix: Use the APR Calculator — it folds origination fees and points into a single comparable rate.

Picking the longest term to lower the payment without modelling interest cost.

Fix: Compare 15, 20, and 30-year scenarios side by side — the total interest difference can exceed the home price itself.

Skipping the extra-payment scenario.

Fix: Even $100/month extra typically shaves 4–6 years and tens of thousands in interest off a 30-year mortgage.

🎯 Who This Calculator Is For

🏠

First-time home buyers

See what monthly payment you can actually live with before house-hunting.

🔁

Existing owners considering refinancing

Compare your current payment to a new-rate scenario, then jump to the Refinance Calculator.

📊

Investors modelling rental cash flow

Use the principal-vs-interest split to project tax-deductible interest in early years.

💷

UK buyers comparing 2-, 5-, and 10-year fixes

Re-run the calculation at each likely SVR rate to stress-test your remortgage budget.

How to Use a Mortgage Calculator

A mortgage is a loan secured against a property that you repay over a fixed term — typically 15 to 30 years in the US and 25 years in the UK. Your monthly payment covers both principal (reducing what you owe) and interest (the cost of borrowing). This calculator shows you exactly how those payments break down.

In the US, the most common mortgage is the 30-year fixed-rate loan. As of 2024-25, average rates for a 30-year fixed mortgage range from approximately 6.5% to 7.5% depending on your credit score, loan type, and lender. A 15-year mortgage typically carries a lower rate but higher monthly payments.

In the UK, most mortgages are repayment mortgages over 25 years, often with 2 or 5-year fixed initial periods before moving to a standard variable rate (SVR). UK lenders typically lend up to 4.5× your annual salary, and most require a minimum 5–10% deposit.

Your monthly mortgage payment does not typically include property taxes and home insurance (in the US these are often collected as escrow) or any service charges, so budget for those separately. Use this calculator as a starting point, then consult a licensed mortgage advisor or broker for a personalised recommendation.

🔬 Methodology & Accuracy

Formula: Standard mortgage amortization (P × r(1+r)ⁿ / [(1+r)ⁿ − 1]) computed in your browser to two decimal places. Extra-payment scenario uses a deterministic month-by-month simulation.

Data sources: Freddie Mac PMMS for US 30-yr fixed averages; UK rate guidance from Bank of England base rate + lender LTV bands. PMI threshold per Fannie Mae/Freddie Mac conforming guidelines.

Last reviewed: January 2026 · Accuracy: Results are precise to two decimal places using IEEE-754 double-precision arithmetic. Intended for educational and planning use only.

For informational purposes only. Results are estimates based on the inputs and formulas provided. For financial, tax, medical, or legal decisions, consult a qualified professional. Rates and regulations change — always verify current figures with official sources.

Accuracy & Feedback

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❓ Frequently Asked Questions

🧭 Next Steps

Complete your Finance picture

These tools naturally pair with the Mortgage Calculator — use them in order to get a full view.

Home Affordability Calculator

Validate this monthly payment fits the 28/36 DTI rule — and discover your true ceiling.

Amortization Calculator

See the month-by-month breakdown and the impact of extra payments.

APR Calculator

Compare lender offers fairly — APR folds fees into a single rate.

Refinance Calculator

Find your break-even point if rates drop or your credit improves.