Mortgage Calculator
Estimate your monthly mortgage payment and view the full amortization schedule.
Inputs
Monthly Payment
$1,896.20
Total Interest Paid
$382,633
Total Cost of Loan
$682,633
Step by step
Monthly interest rate: Annual rate ÷ 12
6.50% ÷ 12
= 0.5417%
Loan term in months: 30 yr × 12
= 360 months
Monthly payment: M = P · r / (1 − (1+r)⁻ⁿ)
$300,000 × 0.005417 ÷ (1 − (1 + 0.005417)⁻360)
= $1,896.20
First payment breakdown (interest heavy at start)
Interest $1,625.00 + Principal $271.20
The interest portion shrinks every month as the balance falls.
Total of all payments
$1,896.20 × 360 months
= $682,633
Total interest: Total Paid − Principal
$682,633 − $300,000
= $382,633
How it works
Your monthly mortgage payment is calculated using the standard fixed-rate amortization formula, which spreads principal and interest across your loan term so that the loan is fully paid off by the final payment.
Formula
M = P · r / (1 − (1+r)^−n)
- M
- Monthly mortgage payment
- P
- Loan principal (amount borrowed)
- r
- Monthly interest rate = Annual rate ÷ 12
- n
- Loan term in months = Years × 12
Mortgage Calculator — full guide
What this calculator tells you
A mortgage payment is not one number, it is four stacked on top of each other: principal, interest, property tax and insurance. Lenders quote the whole stack as PITI, and it is the figure that actually leaves your account each month. This calculator works out the principal-and-interest portion exactly, then lets you layer the rest on top so the total is comparable to a real lender quote.
The core arithmetic is the amortising payment formula:
- M — the monthly payment
- P — the principal, i.e. price minus deposit
- r — the monthly interest rate, which is the annual rate divided by 12
- n — the number of monthly payments, so 30 years is 360
Why your early payments barely touch the balance
Interest is charged on the balance you still owe, so at the start of a 30-year term almost the entire payment is interest. On a £300,000 loan at 6% the first payment is roughly £1,500 of interest and £299 of principal. The split does not reach 50/50 until around year 18.
This is the single most useful thing to understand about a mortgage, and it has a practical consequence: overpayments made early are worth far more than the same amount paid late, because every pound of principal removed early avoids interest for the whole remaining term.
What changes the total most
| Change | Effect on lifetime interest |
|---|---|
| Rate 1 percentage point lower | Very large — typically 12–15% less interest |
| Term 30 years to 25 years | Large — roughly 20% less interest, higher monthly |
| Deposit 10% to 20% | Large — smaller principal and usually removes PMI |
| One extra payment per year | Meaningful — often cuts 4–6 years off a 30-year term |
Rate matters more than almost anything else, which is why shopping the rate is worth more than shaving the price.
Costs people forget
- Property tax varies enormously by location and is usually collected
monthly into an escrow account.
- Home insurance is required by every lender.
- PMI or equivalent is normally charged while equity is under 20%, and can
often be removed once you cross that line — but usually only if you ask.
- Service charges or HOA fees are not part of the mortgage but come out of
the same budget.
A sensible way to use this
Start from what you can comfortably pay each month rather than the maximum a lender will approve. Work backwards to a price, then stress-test it: re-run the numbers two percentage points higher. If the payment at that rate would be uncomfortable, the loan is larger than it looks.
Then compare against the loan calculator for any other debt you carry, and use the amortization calculator to see the exact month your balance crosses a threshold that matters to you.
Guides that use this calculator
This calculator provides estimates for informational purposes only and does not constitute financial advice. Consult a mortgage professional for accurate loan terms.
Frequently Asked Questions
Does this include property tax and insurance?
No, this calculates principal and interest only. Add your local tax and insurance estimates separately for a full monthly cost picture.
What happens if I make extra payments?
Extra payments reduce your principal balance faster, shortening your loan term and reducing total interest paid. This calculator shows the standard schedule without extra payments.