Mortgage Calculator
Estimate your monthly mortgage payment from the loan amount, rate and term, and see how much of each early payment goes to interest rather than principal.
Above 5.31% a thirty-year mortgage costs more in interest than the house did
Total interest passes the principal at a rate that depends only on the term — not on how much is borrowed.
| Term | Interest exceeds the principal above |
|---|---|
| 15 years | 10.60% |
| 20 years | 7.96% |
| 25 years | 6.37% |
| 30 years | 5.31% |
The amount borrowed drops out entirely: the payment is a plain multiple of the principal, so doubling the loan doubles both sides and the crossing point does not move. "Will I pay more in interest than the house cost" is a question about the rate and the term alone, and it has a one-line answer.
| Rate | Interest over 30 years | Over 15 years |
|---|---|---|
| 3.00% | 52% of the principal | 24% |
| 4.50% | 82% of the principal | 38% |
| 5.75% | 110% of the principal | 49% |
| 6.50% | 128% of the principal | 57% |
| 8.00% | 164% of the principal | 72% |
One honest note about the thresholds: the equation cannot be rearranged for the rate, so those figures were found by searching in hundredths of a per cent rather than derived. It is a search, not a formula.
And the term is a bigger lever than the rate
A $300,000 loan at 6.50%, at four different terms:
| Term | Monthly payment | Total interest |
|---|---|---|
| 15 years | $2,613 | $170,398 |
| 20 years | $2,237 | $236,813 |
| 25 years | $2,026 | $307,686 |
| 30 years | $1,896 | $382,633 |
Moving from thirty years to fifteen more than halves the interest — $382,633 down to $170,398, a saving of $212,235 — for a monthly payment 38% higher.
Put the other way round: the last fifteen years of a thirty-year mortgage cost more in interest than the entire fifteen-year loan does. They are the years when the balance is lowest, which is exactly why so little of each payment is interest by then — and exactly why there is so much of it still to pay.
Which is not an argument for the shorter term. A payment you can always make beats a payment you can usually make, and the difference between the two is a decision about risk rather than about arithmetic. The arithmetic is only the part that can be settled here.
How to use
- Enter the loan amount, interest rate and term.
- Add property tax and insurance for a fuller figure.
- Read the monthly payment and total interest.
- Try a shorter term to see what it saves.
Frequently asked questions
How is a mortgage payment calculated?
From the loan amount, the monthly interest rate and the number of payments, using the standard amortisation formula. It produces a level payment where the split between interest and principal shifts over time — heavily interest at the start, heavily principal at the end.
Why is almost all of my early payment interest?
Because interest is charged on the balance outstanding, and at the start that balance is nearly the whole loan. On a 30-year mortgage at typical rates, well over half of the first payment is interest, and it can take a decade before the split reaches even. This is arithmetic, not a fee.
What does the payment not include?
Usually property taxes, homeowners insurance, mortgage insurance if your deposit was small, and any association fees. Together these can add a substantial amount to what actually leaves your account, so a principal-and-interest figure alone understates the real monthly cost.
How much does a shorter term save?
A great deal in total interest, at the cost of a higher monthly payment. Moving from 30 years to 15 typically raises the payment by around half and cuts total interest by roughly two thirds. Whether that trade is right depends on what else the money would do.
Do extra payments help?
Substantially, and more the earlier they are made, because every extra pound of principal removes all the future interest it would have accrued. Check that your lender applies extra payments to principal rather than holding them against the next instalment, since the two are not the same.
Is this figure accurate enough to budget against?
As an estimate, yes; as a commitment, no. Actual offers depend on your credit, the property, the lender's fees and the rate you are actually given, and this calculator knows none of those. Treat it as a way to compare scenarios rather than as a quotation, and do not rely on it as financial advice.
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