Mortgage Calculator

Principal is the amount you actually borrowed, paying it down builds equity (ownership) in your home. Interest is the lender's fee for lending you the money. Every payment is split between the two — early on, most of it is interest; near the end, most of it is principal.

Many lenders collect your property tax and home insurance as part of your monthly payment, hold it in an escrow account, and pay those bills on your behalf when they're due. It doesn't reduce your loan balance — it's a convenience (and a lender safeguard) layered on top.

Private Mortgage Insurance is required by most lenders when your down payment is under 20%, because a smaller down payment is riskier for them. It protects the lender if you default — it does not protect you. By law it must be removed once your balance reaches 78% of the original home value, and you can usually request removal at 80%. This calculator removes it automatically once your balance hits 80%.

Amortization is simply the schedule of paying off a loan through regular payments over time. Even though your total payment stays the same every month (on a fixed-rate loan), the mix of principal vs. interest inside it shifts — that shift is what the "Amortization schedule" tab shows in full detail.

LTV is your loan balance divided by the home's value, as a percentage. A 20% down payment starts you at 80% LTV. Lower LTV generally means better rates, no PMI, and more equity cushion if home prices dip.

Yes — because interest is charged on whatever balance remains, every extra dollar of principal you pay early removes all the future interest that dollar would have accrued. See the "Payoff accelerator" tab for exactly how much time and interest your own numbers would save.