How to Use This Mortgage Calculator
Enter three values: the loan amount (purchase price minus down payment), the annual interest rate from your lender quote, and the loan term. The calculator shows your principal and interest payment. Note: this does not include property taxes, homeowner's insurance, or PMI — your actual monthly housing cost will be higher.
Current average 30-year fixed rates are approximately 7.0% to 7.5% as of May 2025. See our current mortgage rates guide for daily updates. To understand the full mortgage process, read our first-time homebuyer guide.
Understanding Your Mortgage Payment
Each mortgage payment covers two things: principal (which reduces your balance) and interest (the cost of borrowing). In the early years, the majority goes to interest. On a $350,000 mortgage at 7%, your first payment of approximately $2,329 breaks down as roughly $291 to principal and $2,038 to interest. By month 300 (year 25), the split has flipped: roughly $1,500 to principal and $829 to interest.
This is why making extra principal payments early in the loan saves so much money — you cut off the most interest-heavy tail of the amortization schedule.
30-Year vs. 15-Year Mortgage: The Real Comparison
| Feature | 30-Year Fixed at 7% | 15-Year Fixed at 6.4% |
|---|---|---|
| Monthly Payment ($350K loan) | $2,329 | $3,044 |
| Total Interest Paid | ~$489,000 | ~$198,000 |
| Total Amount Paid | ~$839,000 | ~$548,000 |
| Interest Saved vs. 30-yr | — | ~$291,000 |
The 15-year saves almost $300,000 in interest but requires $715 more per month. Whether that tradeoff makes sense depends entirely on your other financial priorities and monthly cash flow.