Learn · Guides · Last reviewed 2026-10-13
How mortgage payments are calculated
What the scheduled principal and interest payment represents, and what this calculator adds on top of it.
Site editorial notes. Written to explain how this site’s calculators work. Not a review by a licensed mortgage professional, and not a recommendation to borrow.
The scheduled payment
A fixed-rate mortgage payment is built so the loan balance reaches zero after a set number of months, if every scheduled payment is made and the rate does not change. Each month, interest is charged on the balance that is still unpaid. The rest of the principal-and-interest payment reduces that balance.
Early in the term, more of the payment goes to interest because the balance is larger. Later, more of it goes to principal. The calculator shows that split in the amortization schedule.
What this calculator treats as the monthly rate
For a monthly fixed-rate loan, the calculator uses the annual interest rate divided by 12, and the number of payments is the term in years times 12. A 30-year term is 360 payments. A 15-year term is 180.
The figure labeled principal and interest is that scheduled payment. Amounts shown in dollars are rounded to the cent for display. The schedule itself is what the payoff date and lifetime interest are summed from.
Housing costs are separate from principal and interest
Property tax, homeowners insurance, mortgage insurance, HOA dues, and other recurring costs can be included in the monthly total. They are not part of the loan’s principal-and-interest formula. Turning “Include taxes and costs” off removes them from the monthly total.
Voluntary extra principal is also separate. It is not added to the monthly housing payment shown at the top of the calculator. The schedule applies it to the balance when you enter it.
What the result is not
The result is an estimate from the numbers you enter. It is not a loan offer, a rate lock, or a statement of what a lender will approve. Servicers can use different due dates, rounding, or escrow rules than this model.
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Written to explain how this site’s calculators work. Not a review by a licensed mortgage professional, and not a recommendation to borrow. These notes are not financial, tax, or legal advice.