Mortgage Calculator 2026
Estimate your monthly mortgage payment, total interest costs, and full amortization schedule for home loans across the United States, European Union, Canada, India, UAE, and Saudi Arabia. This free mortgage calculator uses the standard amortization formula to deliver accurate 2026 payment projections in seconds.
Financial Planning Tool — Not Professional Advice
This calculator provides estimates for educational purposes only. Actual mortgage payments vary based on property taxes, insurance, fees, and lender-specific terms. Always consult licensed mortgage professionals and financial advisors for personalized guidance. Verify current rates and policies with your country's official housing authority.
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Understanding Mortgages in 2026
What Is a Mortgage?
A mortgage is a secured loan used to purchase real estate, where the property itself acts as collateral. The borrower repays the loan through scheduled monthly payments over a fixed period — typically 15 to 30 years — that combine both principal repayment and interest charges. Mortgage lending remains the primary mechanism for home purchases worldwide, and understanding how these loans work is fundamental to making sound financial decisions about homeownership.
Each monthly payment is calculated using an amortization formula that ensures the full balance reaches zero by the final payment date. In the early years, interest dominates each payment because the outstanding balance is still large. As the principal shrinks over time, a greater share of each payment reduces the remaining balance. This gradual shift from interest-heavy to principal-heavy payments is known as amortization.
Principal
The original amount borrowed from the lender. Reduced with each monthly payment over the life of the loan.
Interest
The cost of borrowing, expressed as an annual percentage rate. Higher early in the loan, decreasing as the balance falls.
Amortization
The structured repayment schedule that systematically retires the debt through equal periodic payments.
Mortgage Calculation Formulas
Every mortgage calculator relies on a core set of financial mathematics formulas. Below are the six essential equations used to compute your monthly payment, interest breakdown, and remaining balance. All formulas follow standard financial mathematics conventions used by lenders in every country.
Formula 1: Monthly Mortgage Payment (Amortization Formula)
The standard formula for computing a fixed monthly payment on any amortizing loan:
\[ M = P \times \frac{r\,(1+r)^n}{(1+r)^n - 1} \]
Where \( M \) = monthly payment, \( P \) = loan principal, \( r \) = monthly interest rate (annual rate \(\div\) 12), \( n \) = total number of payments (years \(\times\) 12).
Formula 2: Loan Principal After Down Payment
The actual amount financed equals the home price minus the down payment:
\[ P = \text{Home Price} \times \left(1 - \frac{d}{100}\right) \]
Where \( d \) = down payment percentage. A larger down payment reduces \( P \), lowering both the monthly payment and total interest.
Formula 3: Monthly Interest Portion
The interest charged for any given month depends on the current outstanding balance:
\[ I_k = B_{k-1} \times r \]
Where \( I_k \) = interest in month \( k \), \( B_{k-1} \) = balance at the end of the previous month, \( r \) = monthly interest rate.
Formula 4: Principal Portion of Each Payment
The amount that actually reduces your loan balance each month:
\[ \text{Principal Payment}_k = M - I_k \]
Early in the loan, \( I_k \) is large so the principal payment is small. Over time, the principal portion grows as the balance decreases.
Formula 5: Total Interest Paid Over the Loan
The lifetime cost of borrowing equals total payments minus the original principal:
\[ \text{Total Interest} = (M \times n) - P \]
On a 30-year mortgage, total interest often exceeds the original loan amount — making this the single most important number to compare between loan options.
Formula 6: Remaining Balance After k Payments
To find the outstanding balance at any point during the loan:
\[ B_k = P \times \frac{(1+r)^n - (1+r)^k}{(1+r)^n - 1} \]
Where \( B_k \) = remaining balance after \( k \) payments. This formula is used to generate the full amortization schedule.
Down Payment and Closing Costs by Country
Upfront costs for purchasing a home vary significantly across countries. The down payment is the portion paid out of pocket, while closing costs cover legal fees, transfer taxes, and administrative charges. Below is a 2026 summary for each supported region.
| Country | Typical Down Payment | Closing Costs | Key Fees |
|---|---|---|---|
| United States | 3%–20% | 2%–6% of loan | Origination, title insurance, appraisal, PMI if <20% down |
| European Union | 10%–30% | 5%–15% of price | Notary fees, land transfer tax (varies by member state), registration |
| Canada | 5%–20% | 1.5%–4% of price | Land transfer tax, legal fees, CMHC insurance if <20% down |
| India | 10%–25% | 7%–10% of price | Stamp duty (5%–7%), registration fees, GST on under-construction |
| UAE | 20%–25% (expats) | 6%–8% of price | DLD fee 4%, agency fee 2%, mortgage registration 0.25% |
| Saudi Arabia | 10%–30% | 2%–5% of price | Real estate transfer fee 5%, valuation, admin charges |
Types of Mortgages
Fixed-Rate Mortgage
Interest: Locked for the entire term
Payment: Predictable and constant
Best for: Long-term homeowners seeking stability
Most popular in the US and Canada. Available in EU, India, UAE, and KSA with varying terms.
Adjustable-Rate Mortgage (ARM)
Interest: Changes after an initial fixed period
Payment: Can increase or decrease
Best for: Short-term ownership plans
Common as 5/1 ARM in the US; standard in UAE and KSA where variable rates dominate.
Government-Backed Loans
US: FHA (3.5% down), VA (0% down), USDA
India: PMAY subsidy scheme
Canada: CMHC-insured loans
Lower barriers to entry; often require mortgage insurance premiums.
Islamic / Sharia-Compliant Financing
Structure: Murabaha, Ijara, or Diminishing Musharaka
Interest: No riba; profit rate instead
Best for: Buyers seeking Sharia compliance
Widely available in UAE, KSA, and select banks in the US, EU, Canada, and India.
Understanding Amortization: How Your Payment Changes Over Time
The Amortization Process
With a fixed-rate mortgage, the monthly payment amount stays constant throughout the entire loan term. However, the composition of that payment shifts dramatically. During the first few years, the majority of each payment covers interest charges because the outstanding principal is still near its original value. As you continue making payments and the balance decreases, the interest portion shrinks and the principal portion grows.
This is why making extra payments toward principal early in the loan has such a powerful effect — each dollar paid early eliminates years of compounding interest. Making just one additional payment per year on a 30-year mortgage can reduce the total term by 5 to 7 years and save tens of thousands in interest.
Example: $300,000 Loan at 6.5% for 30 Years
Year 1 — First Payment
Payment: $1,896.20
Interest: $1,625.00
Principal: $271.20
Year 15 — Mid-point
Payment: $1,896.20
Interest: $1,061.49
Principal: $834.71
Year 30 — Final Payment
Payment: $1,896.20
Interest: $10.22
Principal: $1,885.98
Notice how interest drops from 86% of the first payment to less than 1% of the last payment. The total interest paid over 30 years on this example loan would be approximately $382,633 — more than the original loan amount.
2026 Official Government Mortgage Resources
Current mortgage rates, regulations, and buyer assistance programs change frequently. Below are verified government and regulatory authority websites for each supported country. Always verify terms directly with these official sources before making financial decisions.
United States
Federal programs: FHA, VA, USDA loans. PMI required below 20% down.
European Union
European Commission — Mortgage Credit
Mortgage Credit Directive applies across all EU member states.
Canada
CMHC mortgage insurance required for down payments below 20%.
India
Home loan interest deduction under Section 24(b) up to Rs. 2 lakh per year.
United Arab Emirates
LTV cap: 80% for UAE nationals, 75% for expats on first property.
Saudi Arabia
REDF — Real Estate Development Fund
Sakani housing program provides subsidized financing for first-time buyers.
Frequently Asked Questions About Mortgages
How is a monthly mortgage payment calculated?
The monthly payment on a fixed-rate mortgage is calculated using the amortization formula: M = P x [r(1+r)^n] / [(1+r)^n - 1], where P is the loan principal, r is the monthly interest rate (annual rate divided by 12), and n is the total number of payments. This formula ensures the loan is fully repaid by the end of the term through equal monthly installments.
What is the difference between interest rate and APR?
The interest rate is the cost of borrowing the principal amount, expressed as a percentage. The APR (Annual Percentage Rate) includes the interest rate plus additional costs such as origination fees, mortgage insurance, and closing costs, giving you the true total cost of the loan. The APR is always equal to or higher than the stated interest rate.
How much should I put down on a house in 2026?
In the US, you can put as little as 3% down with conventional loans or 3.5% with FHA loans, though 20% avoids PMI. Canada requires a minimum of 5%. In the UAE, expats typically need 20-25% down. India generally requires 10-25%. The ideal amount depends on your financial situation, but a larger down payment reduces your monthly payment and total interest cost.
Is a 15-year or 30-year mortgage better?
A 15-year mortgage has higher monthly payments but dramatically lower total interest — often saving you 50% or more in interest compared to a 30-year term. A 30-year mortgage provides lower monthly payments and more financial flexibility. The best choice depends on your monthly budget, other debts, and long-term financial goals.
What is PMI and how can I avoid it?
Private Mortgage Insurance (PMI) is required in the US when your down payment is less than 20% of the home price. It protects the lender, not you, and typically costs 0.5% to 1.5% of the loan amount annually. You can avoid PMI by making a 20% or larger down payment. In Canada, this equivalent is called CMHC insurance. UAE and KSA do not have a direct PMI equivalent but enforce higher minimum down payments instead.
Can I use this mortgage calculator for Islamic (Sharia-compliant) financing?
Yes. While Islamic financing structures like Murabaha, Ijara, and Diminishing Musharaka avoid conventional interest (riba), the mathematical outcome for monthly payments is often comparable. You can use this calculator to estimate your monthly obligation by entering the bank's profit rate in the interest rate field. For exact terms, consult your Islamic banking provider in the UAE, KSA, or wherever Sharia-compliant products are offered.
About the Author
Adam
Co-Founder @ RevisionTown
Math expert specializing in various international curricula including IB (International Baccalaureate), AP (Advanced Placement), GCSE, IGCSE, A-Levels, and more. Passionate about making mathematics accessible and engaging for students worldwide through innovative educational tools and resources that connect mathematical concepts with real-world applications in personal finance, homeownership, and economic decision-making.
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Start here (prerequisites)
- Simple Interest Formula: Complete Guide
- Compound Interest Formula: Complete Guide
- Percentage Calculator
Practice and application
- Compound Interest Calculator
- Simple Interest Calculator
- Amortization Calculator
- Loan Repayment Calculator with Amortization Schedule
- Home Loan EMI Calculator