Mortgage Payment Calculator

How this is calculated

This is the standard amortisation formula. The monthly payment is the loan amount multiplied by the monthly rate, divided by one minus one over (one plus the monthly rate) raised to the number of payments. The monthly rate is the annual rate divided by 12 and then by 100 - a 6.5 percent annual rate is 0.0054167 per month. Both conversions are inside the formula rather than described beside it, because a formula and its glossary drift apart and the glossary is the part readers skip. The number of payments is the term in years times 12. A 30-year loan is 360 payments. ⚠️ THIS IS PRINCIPAL AND INTEREST ONLY. It is not what leaves your bank account. Property tax, homeowners insurance, mortgage insurance and any HOA fee are usually collected with the payment, and together they routinely add hundreds a month. A lender's quote for the full monthly cost will be visibly higher than this figure, and that is not a discrepancy - it is a different number. Ask for PITI if you want the comparable one. EVERY EARLY PAYMENT IS ALMOST ENTIRELY INTEREST. On the default figures the first payment is about 1,625 dollars of interest and only about 271 dollars of principal. That is why the balance barely moves for years, and why paying anything extra early is worth so much more than paying the same amount later - an extra payment in year one removes interest that would have accrued for the following 29 years. The amount you borrow is the price MINUS the deposit. Entering the house price gives you the payment for a loan nobody offered you. Rate is the single most sensitive input. Sweep it and watch: at these figures each additional percentage point adds roughly 200 dollars a month, and that difference compounds over 360 payments into tens of thousands. Not included: fees, points, PMI, a rate that changes, overpayments, and the fact that a fixed rate is only fixed for its fixed period in many countries.

Common questions

Why is my lender's quote higher than this?

Because this is principal and interest only, and a lender quotes the whole monthly bill. Property tax, homeowners insurance, mortgage insurance and any HOA fee are usually collected alongside the payment, and together they routinely add hundreds a month. That is not a discrepancy between the two figures - they are answers to different questions. The industry term for the full one is PITI, and it is the number to ask for when you are comparing what you can actually afford.

Why does my balance barely move?

Because an early payment is almost entirely interest. On the default figures the first payment is about 1,625 dollars of interest and about 271 dollars of principal - so roughly 86 percent of it never touches what you owe. Interest is charged on the outstanding balance, and at the start the balance is the whole loan. The ratio flips slowly over the term, which is why the last few years reduce the balance so quickly and the first few seem to do nothing.

Is paying extra early really worth it?

Far more than paying the same amount later, and the reason is in the previous answer. An extra payment in year one removes principal that would otherwise have accrued interest for the remaining 29 years; the same payment in year 25 only removes five years of it. This is the one lever on a fixed-rate mortgage that reliably changes the total, and its value falls steadily the longer you wait. Check for early repayment charges first - some loans penalise it.

What should I enter as the amount?

The amount you are BORROWING - the price minus your deposit. Entering the house price gives you the payment on a loan nobody offered you, which is a surprisingly common way to talk yourself out of, or into, a house. If you are working the other direction and want to know what price you can support, work back from a payment you are comfortable with rather than forward from a price you like.

How much does the rate matter?

More than any other input. Sweep the rate and hold everything else: at these figures each additional percentage point adds roughly 200 dollars a month, and that difference then repeats 360 times. A rate that looks like a rounding difference at the point of quotation is tens of thousands of dollars over the term. It is worth more effort than almost anything else in the process, and it is also the input people negotiate least.

Does a shorter term save money?

A great deal of it, and the calculator shows both sides. A shorter term raises the monthly payment - fewer payments have to cover the same principal - but it cuts the total interest sharply, because interest accrues for fewer years on a balance that falls faster. Compare the total interest at 30 years and at 15 on the same loan. Whether the higher payment is affordable is a separate question from whether it is cheaper, and only one of those two is arithmetic.

Take it further with AI

Copy this into ChatGPT or Claude with your own numbers filled in. It hands over the figures this calculator worked out, so the answer is built on real arithmetic instead of a guess.

I used the Mortgage Payment Calculator at https://www.bfcbrilliance.com/tools/mortgage-payment-calculator.

What I entered:
- Amount borrowed ($): ___
- Annual interest rate (%): ___
- Term (years): ___

What it calculated:
- Monthly payment: ___
- Total paid over the term: ___
- Total interest: ___
- Interest as a share of the loan: ___
- Interest in your FIRST payment: ___

Use those figures as given — they are already worked out, so please don't recalculate or estimate your own. Help me turn them into a plan: what to buy or do, in what order, roughly what it should cost, and the mistakes people most often make with this job.

Keep this general and do not give financial advice — flag where I should talk to a qualified adviser.

More buying a home tools