Mortgage Payments & Payoff Simulator
Simulate standard monthly housing costs or model advanced principal payoff accelerations to visualize compound interest savings over your amortization schedule.
$2,723/mo
Based on 30-year fixed rate of 6.5%
Understanding Your Mortgage Calculations
How is my monthly payment calculated?
Your monthly payment consists of Principal & Interest (P&I) which pays down the base loan amount, plus additional escrows. These escrows include Property Taxes, Homeowners Insurance, and any HOA fees which go directly to their respective bodies.
Why do extra payments make such a large impact?
Normally, a large portion of your early mortgage payments goes entirely toward interest. By adding an extra payment, 100% of that extra amount goes directly to pay down your loan principal. This shrinks your remaining balance faster, preventing interest from compounding and saving you huge sums over the life of the loan.
What is the Rent vs. Buy crossover?
Buying a home builds long-term equity, but comes with upfront closing costs, maintenance fees, and interest. Renting has lower initial costs but offers no equity. The crossover point is the year where the accumulated financial benefits of owning (appreciation, equity build) surpass the costs of renting.
A Worked Example
Say you take a $400,000 mortgage at 6.5% over 30 years. The principal-and-interest payment works out to about $2,528 a month, and across the full term you'd pay roughly $510,000 in interest — more than the price of the home itself.
Now add $200 to every payment. Because that extra money goes straight to principal, it shrinks the balance that interest is charged on — paying the loan off several years early and saving a five-figure sum in interest. Property taxes, homeowners insurance, and any HOA dues are added on top of P&I, which is why your real monthly housing cost is usually higher than the loan payment alone.
Frequently Asked Questions
What's the difference between a 15-year and 30-year mortgage?
A 15-year loan has higher monthly payments but a lower interest rate and far less total interest paid, while a 30-year loan keeps payments lower and more affordable but costs much more over time. The payoff simulator lets you compare both.
How much of a down payment do I need?
Conventional loans often allow as little as 3–5% down, but putting down 20% lets you avoid PMI and lowers your monthly payment. A larger down payment also reduces the total interest you pay over the life of the loan.
Does my credit score affect my mortgage?
Yes. A higher credit score generally qualifies you for a lower interest rate, and even a small rate difference can save tens of thousands of dollars over a 30-year term.
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