Understanding Your Mortgage

A mortgage is often the largest financial commitment a person makes. Understanding your monthly payment is crucial for budgeting, but the real eye-opener is seeing the total interest you'll pay over the lifetime of the loan. A small difference in the interest rate can translate to tens of thousands of dollars over 30 years.

How is the Monthly Payment Calculated?

Our calculator uses the standard amortization formula to determine your payment. This formula balances the principal (the amount you borrowed) and the interest (the cost of borrowing) over the loan term. In the early years of your mortgage, a larger portion of your payment goes toward interest. As you pay down the loan, more of your payment starts to cover the principal.