Mortgage Calculator
Enter loan amount, interest rate, and term to calculate monthly payment and total interest.
What a Mortgage Payment Consists Of
A mortgage payment has two parts that change over time: principal, which reduces what you owe, and interest, which is charged on the remaining balance. In an equal-payment mortgage the total stays flat while the split shifts โ early payments are mostly interest, later ones mostly principal. A shorter term raises the monthly payment but cuts total interest sharply, because interest is charged on the balance for fewer months.
Mortgage Guide
Equal Payment keeps monthly payments constant. Equal Principal reduces total interest paid.
Monthly payment = P ร i รท (1 โ (1 + i)^โn), where P is the loan amount, i the monthly rate (annual รท 12) and n the number of months. The schedule applies the same formula month by month, so the balance reaches zero exactly at the end of the term.
Worked Example
300,000 at 4.5% over 30 years โ about 1,520 a month and roughly 247,000 of interest in total.
The same loan over 15 years โ about 2,295 a month, but total interest falls to roughly 113,000.
What the Schedule Does Not Include
Payments here cover principal and interest only. Real monthly costs usually add property tax, homeowners insurance, mortgage insurance and association fees, and the schedule ignores closing costs, rate resets on adjustable-rate loans and extra repayments. A fixed rate is assumed for the whole term, so treat the output as a planning estimate rather than a lender quote.
Frequently Asked Questions
- How much does a shorter term save?
- A lot, because interest is charged for fewer months. On 300,000 at 4.5%, moving from 30 to 15 years raises the payment by roughly 775 but halves the total interest.
- Why is most of my early payment interest?
- Interest is calculated on the outstanding balance, which is largest at the start. As the balance falls the interest part shrinks and more of each payment goes to principal โ the crossover usually happens in the second half of the term.
- Do extra payments help?
- Yes. Extra money goes straight to principal, which shortens the term and reduces total interest. Even one extra payment a year can cut several years off a 30-year mortgage.