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Mortgage Calculator

Work out a mortgage payment for the US, UK or Canada with taxes, insurance and PMI, when PMI ends, and what extra payments save.

Country

20% of the price, $ 80,000

1 to 50 years

An example rate: enter your quote.

First payment
Monthly payment
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Extra payments

    Works out a mortgage payment the way lenders in the United States, the United Kingdom and Canada do, or for a plain monthly loan anywhere else. US payments include property tax, insurance, HOA dues and PMI, with the month PMI ends under federal law. Canadian payments use half-yearly compounding and add the default insurance premium; UK payments follow an initial deal and a follow-on rate. Extra payments show the interest and time they save.

    How to use it

    • Country — starts from where you are. Picking the US, the UK or Canada switches to its currency, which you can still change. Other is a monthly loan with interest charged monthly and no country's rules.
    • Down payment — an amount or a percentage of the price. Under 20% adds PMI in the US and the default insurance premium in Canada.
    • Interest rate — the starting value is an example; enter the rate you were quoted.
    • United States — under Taxes, insurance and HOA: property tax and homeowners insurance a year, as an amount or a % of the price; HOA dues a month; and, under 20% down, the PMI rate from your lender. Payments can be monthly or every two weeks.
    • United Kingdom — repayment, interest-only, or part and part; an initial rate period with the rate that follows it; and your lender's penalty-free overpayment allowance, if you know it.
    • Canada — compounding (half-yearly for a fixed rate, monthly for a variable one), six payment frequencies, the mortgage term until renewal, and whether you are a first-time buyer or buying a new build.
    • Extra payments — up to five, each once, with every payment or once a year from a payment number. They shorten the term, or lower the payment instead on a monthly or semi-monthly schedule.

    How it works

    The loan is repaid in equal payments, each paying the period's interest first and the rest off the balance. The payment and each period's interest are rounded to the cent, and the last payment takes whatever remains.

    A Canadian fixed rate compounds half-yearly, so a monthly payment is charged (1 + r ÷ 2)^(1/6) − 1 a month: at 5% that is 0.4124%, not 5 ÷ 12 = 0.4167%. Bi-weekly and weekly payments are the monthly payment × 12 ÷ 26 or ÷ 52; accelerated ones are the monthly payment ÷ 2 or ÷ 4, which pays the loan off years sooner.

    A US payment adds a twelfth of the yearly property tax and insurance, the HOA dues and PMI to principal and interest (PITI). PMI is the yearly rate × the loan amount, spread over the payments. Every-two-weeks payments are half the monthly payment, 26 a year, with interest at the annual rate ÷ 26.

    An interest-only part is repaid in one sum at the end; the payment covers its interest and repays the rest of the loan over the term. After an initial rate period, the payment is worked out afresh at the follow-on rate over the years left.

    Payment = (P × (1 + i)ⁿ − B) × i ÷ ((1 + i)ⁿ − 1)
    Canada: i = (1 + r ÷ 2)^(2 ÷ p) − 1
    PITI = principal and interest + tax ÷ 12 + insurance ÷ 12 + HOA + PMI
    P = loan amount, B = interest-only part, n = payments, i = rate per payment, r = annual rate, p = payments a year

    Examples

    A 400,000 US home with 5% down at 6.5% over 30 years

    With 1.1% property tax ($ 4,400.00 a year), 1,500 of insurance and 0.5% PMI, the monthly payment is $ 3,051.86, of which $ 2,401.86 is principal and interest. PMI of $ 158.33 a month is charged through payment 135, after 11 years 3 months, when the balance is scheduled to reach 78% of the price; it can be cancelled on request after payment 124. PMI costs $ 21,374.55 in all.

    The same mortgage with an extra 200 a month

    An extra 200 with every payment saves $ 110,460.85 of interest and pays the loan off 5 years 10 months sooner. The balance reaches 80% after payment 87, so PMI can be cancelled on request that much sooner; the automatic end stays at payment 135, as the law uses the original schedule.

    100,000 in Canada at 5% over 25 years

    Compounded half-yearly, the monthly payment is $ 581.60 and the balance at renewal after 5 years is $ 88,507.86. Compounded monthly, as US-made calculators assume, the payment would be $ 584.59. The Government of Canada's calculator shows a renewal balance a few cents lower, because it carries the payment unrounded.

    A 240,000 UK interest-only mortgage at 4.5% over 25 years

    The monthly payment is £ 900.00, all of it interest, and the full £ 240,000.00 is still owed at the end of the term. Over 25 years the interest comes to £ 270,000.00.

    Rules and sources

    US PMI. Under the Homeowners Protection Act, borrower-paid PMI on a conventional loan ends automatically when the balance is first scheduled to reach 78% of the home's original value, if payments are current, and in any case after the month at the midpoint of the term. The borrower may ask for it to be cancelled once the balance reaches 80%, which extra payments bring forward. The original value is the lower of the price and the appraisal at purchase; the tool uses the price. FHA mortgage insurance follows its own rules, and VA and USDA loans carry no PMI.

    US escrow. Servicers usually collect tax and insurance with the payment. RESPA lets them hold a cushion of at most one-sixth of the year's escrow payments, and review the account each year, so the payment changes with the bills.

    Canadian default insurance. A down payment under 20% needs mortgage default insurance. CMHC's premium on the total loan is 2.80% up to 85%, 3.10% up to 90%, 4.00% up to 95% of the price, plus 0.20% for an amortization over 25 years. It is added to the loan. Ontario, Quebec and Saskatchewan charge provincial sales tax on it, paid at closing.

    Canadian limits. The minimum down payment is 5% of the first 500,000 and 10% of the rest; homes of 1,500,000 or more cannot be insured and need 20%. An insured mortgage amortizes over at most 25 years, or 30 for a first-time buyer or a new build.

    Canadian stress test. The minimum qualifying rate is the contract rate plus 2 points or 5.25%, whichever is higher. The Department of Finance sets it for insured mortgages, and OSFI for uninsured ones at federally regulated lenders. The tool shows the monthly payment at that rate, on the loan with any premium, beside the real one.

    Canadian compounding. The Interest Act requires a blended-payment mortgage to state its rate calculated yearly or half-yearly, not in advance, which is why fixed rates are quoted compounded half-yearly.

    Sources

    Reviewed

    Frequently asked questions

    Usually the escrow: servicers collect tax and insurance at their own estimate, plus a cushion, and adjust it each year. Insurance added to the loan, a different compounding convention or interest charged by the day can also move the payment, and rounding makes the last payment differ by a few cents.
    Half the monthly payment every two weeks adds up to 13 monthly payments a year instead of 12, so the loan ends years sooner. It saves only if the servicer applies each half when it arrives.
    Yes, by asking in writing once the balance reaches 80% of the original value, with a good payment record. The tool shows that date, which extra payments bring forward.
    Interest-only has the lower payment but repays nothing, so the whole loan is still owed at the end and needs a plan to repay it, such as savings or selling the home. Part and part splits the difference: the interest-only share is owed at the end and the rest is repaid as you go.

    See also