How your monthly payment is calculated
Your loan amount is the home price minus your down payment. That amount, your interest rate, and your loan term go into the standard amortization formula, which spreads a fixed payment evenly across every month of the loan. Each payment first covers interest on whatever balance remains, and whatever is left over reduces the principal. Because interest is charged on a monthly balance, a 30 year loan and a 15 year loan at the same rate produce very different total interest even though the underlying formula is identical.
How to read the amortization chart
The chart above tracks two lines: your remaining balance and the interest you have paid so far. In the early years the balance barely moves while the interest line climbs quickly, because most of each payment is covering interest on a large balance. As the loan matures, the balance falls faster and the interest line flattens, since a shrinking balance means a shrinking interest charge each month. Shortening your term or making extra payments toward principal pulls both lines toward their endpoints sooner.
What this estimate leaves out
This calculator covers principal and interest only. It does not include property taxes, homeowners insurance, private mortgage insurance, or HOA dues, all of which get folded into a typical monthly mortgage bill and can add several hundred dollars on top of what is shown here. A smaller down payment, especially anything under 20 percent, usually triggers PMI until you build enough equity, so treat this number as a starting point for budgeting rather than a firm offer from a lender.