Calculate your 30-year fixed mortgage payment, total interest cost, and amortization breakdown. Understand PMI, how to eliminate it, and when refinancing makes sense.
Based on $300,000 loan at 7.0% APR — most popular mortgage term in the US
Enter your loan amount, down payment, interest rate, and property tax estimate to see your complete monthly payment breakdown.
Open Mortgage Calculator →Over 90% of US homebuyers choose the 30-year fixed-rate mortgage, and for good reason. It offers the lowest required monthly payment for any given loan amount, providing maximum financial flexibility. At 7.0% on a $300,000 loan, the monthly principal and interest payment is $1,996 — 24% lower than the $2,613 payment on a 15-year mortgage at 6.5%.
The lower payment allows buyers to: afford more home for the same monthly budget, maintain larger emergency funds, continue funding retirement accounts, and absorb life's financial surprises without mortgage default risk. The predictability of a fixed rate for 30 years also insulates homeowners against rising interest rates — your payment stays the same regardless of what rates do in the broader market.
Amortization is the schedule by which your monthly payment is split between interest and principal reduction. With a 30-year mortgage at 7%, the split is heavily weighted toward interest in the early years — a structure that surprises many first-time buyers.
Month 1 on a $300,000 loan: your $1,996 payment includes approximately $1,750 in interest and only $246 in principal. After 12 months, you've paid $23,952 in payments — but your balance has only decreased by about $2,954 (from $300,000 to $297,046). The other $20,998 went to interest. By year 10, the split shifts to roughly $1,550 interest / $446 principal. By year 25, it's closer to $700 interest / $1,296 principal. This front-loading of interest is why making extra principal payments in the early years has a disproportionate impact on total interest paid and loan payoff date.
Private Mortgage Insurance (PMI) is required when your down payment is less than 20% of the home's purchase price. It protects the lender (not you) in case of default, and costs approximately 0.5–1.5% of the loan amount annually — typically $125–$375 per month on a $300,000 loan with 5% down.
PMI is automatically canceled by law (Homeowners Protection Act of 1998) once your loan-to-value ratio reaches 78% of the original purchase price through regular amortization. You can also request PMI cancellation when you believe your LTV has reached 80%, either through payments or a home value increase — you'll need a formal appraisal to document the increased value. Some lenders allow piggyback loans (80/10/10 structure) to avoid PMI entirely on a conventional loan with a smaller down payment.
The 30-year fixed-rate mortgage has a rate that never changes — your P&I payment for month 1 is identical to your payment in month 360. An ARM (adjustable-rate mortgage) starts with a fixed rate for a set period (5, 7, or 10 years) and then adjusts annually based on a market index plus a margin.
ARMs typically offer starting rates 0.5–1.0% lower than fixed rates, which translates to meaningfully lower early payments. A 5/1 ARM at 6.2% vs a 30-year fixed at 7.0% saves $146/month on a $300,000 loan during the 5-year fixed period. After year 5, the rate adjusts annually — it could go up or down. ARMs are most appropriate for buyers who plan to sell or refinance within the initial fixed period. For long-term homeowners, a 30-year fixed provides peace of mind and protection against rate increases.
Refinancing replaces your current mortgage with a new one — typically to lower your rate, reduce your monthly payment, or shorten your term. A general rule of thumb: consider refinancing when you can reduce your rate by at least 0.5–1.0%, and your break-even period (closing costs divided by monthly savings) is less than the time you plan to stay in the home. Closing costs typically run 2–5% of the loan amount. To refinance a $300,000 mortgage with $9,000 in closing costs and save $200/month, your break-even is 45 months (3.75 years). If you plan to stay 5+ years, refinancing makes financial sense.
It offers the lowest required monthly payment — making homeownership accessible to more buyers. On $300K, a 30-year at 7% is $1,996/mo vs $2,613/mo on a 15-year. The lower payment preserves financial flexibility for retirement savings, emergency funds, and life expenses. The fixed rate also protects against future rate increases.
Your payment is split between interest and principal each month — heavily weighted toward interest early on. Month 1 on $300K at 7%: $1,750 interest / $246 principal. After 5 years, you've paid ~$119K but reduced the balance by only ~$15K. Extra early principal payments save dramatically more interest than the same payments made later.
PMI is required with less than 20% down. Cost: 0.5–1.5%/year (~$125–$375/month on $300K). It's automatically canceled by law at 78% LTV through regular payments. You can request cancellation at 80% LTV — with a new appraisal if home value has increased. Piggyback loans (80/10/10) can avoid PMI entirely at purchase.
Fixed-rate: same rate and P&I payment for the full 30 years — ideal for long-term homeowners. ARM: lower starting rate fixed for 5–10 years, then adjusts annually. ARMs can save $100–$200/month initially but carry rate-increase risk after the fixed period. Best for buyers planning to sell or refinance within the initial fixed term.