The advertised house price is not what a mortgage really costs. Your monthly payment blends the loan amount, the interest rate and the term — and small changes to any of them move the payment by hundreds. This calculator shows the payment, and just as importantly, the total interest hiding behind it.
Mortgage Payment Calculator
Work out your monthly principal & interest payment, total interest and the true total cost of your loan.
How it works: your loan amount (price minus down payment) is repaid in equal monthly instalments using the standard amortisation formula, so early payments are mostly interest and later ones mostly principal. Property tax and insurance, if entered, are simply spread evenly across each month. Your actual rate and payment will depend on your lender, credit profile and the deal you choose.
How it works
Enter the property price and your deposit (or the loan amount directly), the interest rate, and the mortgage term in years. If you are in the US, you can add property tax, homeowners insurance and HOA fees to see the full monthly housing cost lenders call PITI. UK buyers can add a product fee if it is being added to the loan rather than paid upfront.
The calculator produces your monthly payment, the total amount repaid over the term, and the total interest. Try changing one input at a time — extending the term by five years, for example — to see the trade-off between a lower monthly payment now and far more interest overall.
How the calculation works
Mortgage payments use the amortization formula:
M = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)
Where P is the loan amount, r is the monthly interest rate (annual rate divided by 12), and n is the total number of monthly payments.
Early payments are mostly interest because the balance is at its largest. As you pay the balance down, the interest share shrinks and more of each fixed payment clears capital. This is why, after five years of payments on a long mortgage, your balance has fallen by much less than five years’ worth of payments might suggest — and why overpayments early in the term are so powerful.
The rate you enter should be the product rate, not the lender’s comparison rate. In the US, APR folds in some fees; in the UK, the SVR is what you revert to after a fixed deal ends, so model that scenario separately if you plan to stay with the lender.
Worked example: $320,000 loan at 6.5% over 30 years
Step 1 — Monthly rate and payments. r = 6.5% ÷ 12 = 0.5417% per month. n = 30 × 12 = 360 payments.
Step 2 — Apply the formula. M = $320,000 × 0.005417 × (1.005417)³⁶⁰ ÷ ((1.005417)³⁶⁰ − 1). Since (1.005417)³⁶⁰ ≈ 6.99, this gives M ≈ $2,023 per month.
Step 3 — The true cost. $2,023 × 360 = $728,280 repaid in total, of which $408,280 is interest — more than the amount borrowed. In month one, $1,733 of your $2,023 payment is interest and only $290 reduces the balance. By year 20, that split has roughly reversed.
Shortening the same loan to 15 years lifts the payment to about $2,788, but total interest falls to roughly $181,800 — a saving of over $226,000 for an extra $765 a month.
Things to watch
- Term length is the most expensive “affordability” lever. Dropping the payment by stretching 25 years to 35 years feels painless month to month, yet can add six figures of interest. Always look at total interest, not just the monthly figure.
- Rate moves matter more than price haggling at the margin. On a $320,000 loan, negotiating the rate from 6.5% to 6.0% saves about $105 a month and roughly $38,000 over 30 years — often more than a small discount on the purchase price.
- Budget for the full housing cost. US buyers should add property tax (often 0.5–2% of value per year depending on state), insurance and any HOA dues. UK buyers should remember buildings insurance, ground rent or service charges on leasehold flats, and the jump when a fixed rate ends.
- Your deposit size changes your rate band. In the UK, crossing an LTV threshold (90%, 85%, 75%, 60%) usually unlocks cheaper deals. In the US, reaching 20% down removes private mortgage insurance (PMI), which can cost 0.5–1% of the loan per year.
- Fixed vs variable is a risk decision, not a guess about rates. A fixed rate buys certainty for budgeting; a tracker or adjustable rate may start cheaper but your payment can rise. Model a 2% rate increase in the calculator to see if you could still afford it.
Frequently asked questions
How much deposit do I actually need?
In the US, conventional loans can start at 3–5% down and FHA loans at 3.5%, but 20% avoids PMI. In the UK, 5–10% deposits are common for first-time buyers, with the best rates usually at 60–75% loan-to-value. A bigger deposit also cuts the loan amount itself, compounding the saving.
Should I choose a 15-year or 30-year term?
The 15-year term has a much higher payment but dramatically less interest and builds equity faster. A common middle path is a 30-year term with planned overpayments, which keeps contractual flexibility if income drops — provided the lender allows penalty-free overpayments.
Why is my balance falling so slowly?
Because of amortization: interest is charged on the outstanding balance, which is highest at the start. On the example above, after five years of $2,023 payments ($121,380 paid), the balance has only fallen by about $22,000. This is normal maths, not a lender error.
Does the calculator include taxes and insurance?
The core payment is principal and interest only, which is the figure comparable across lenders. US users can add tax and insurance estimates in the advanced fields to see a realistic all-in monthly cost.
What happens when my fixed rate ends?
In the UK you normally move to the lender’s standard variable rate, which is usually much higher — remortgaging to a new deal before the fix ends avoids this. In the US, fixed-rate mortgages stay fixed for the full term, but adjustable-rate mortgages (ARMs) reset after their initial period.
This calculator is for guidance only and isn’t financial advice.