Mortgage Calculator
Enter your loan amount, interest rate, and term to see your estimated monthly payment, the total interest you'll pay over the life of the loan, and a year-by-year breakdown of principal versus interest.
| Year | Principal paid | Interest paid | Remaining balance |
|---|
How the Mortgage formula works
The standard fixed-rate mortgage payment formula is:
M = P × [ r(1 + r)ⁿ ] / [ (1 + r)ⁿ − 1 ]
Where M is the monthly payment, P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments (years × 12).
Step-by-step calculation
- Convert the annual interest rate to a monthly rate by dividing by 12.
- Convert the loan term in years to a total number of monthly payments.
- Apply the amortization formula to solve for the fixed monthly payment.
- Multiply the monthly payment by the number of payments to find the total repaid.
- Subtract the original principal from the total repaid to find total interest.
Worked example
A $300,000 loan at 6.5% annual interest over 30 years: monthly rate = 0.065/12 ≈ 0.005417, n = 360. Applying the formula gives a monthly payment of approximately $1,896, for a total of about $682,560 paid over 30 years — roughly $382,560 in interest.
Frequently asked questions
Does this include property taxes and insurance?
The core payment figure covers principal and interest (P&I). You can add estimated monthly taxes and insurance separately, and the calculator will show the combined total payment.
What's the difference between interest rate and APR?
The interest rate determines your principal-and-interest payment. APR also factors in lender fees and closing costs, so it's typically slightly higher and is meant for comparing total loan cost across lenders.
How does a shorter loan term affect the payment?
A shorter term (e.g., 15 years instead of 30) raises the monthly payment but substantially reduces total interest paid, since less time is spent accruing interest on the outstanding balance.
What is amortization?
Amortization is the process of paying off a loan through fixed payments where, early on, more of each payment goes to interest, and over time more goes to principal, even though the total payment stays the same.