Estimate your monthly mortgage payment, total interest and see exactly how each payment splits between principal and interest.
| Year | Interest paid | Principal paid | Remaining balance |
|---|
A fixed-rate mortgage payment is calculated with the standard amortisation formula: M = P × r(1+r)n / ((1+r)n − 1), where P is the loan amount, r the monthly interest rate and n the number of payments. The result — your monthly payment — stays the same for the life of the loan, but what it pays for changes dramatically. In the early years most of each payment goes to interest; near the end, almost all of it reduces the principal. That is why the amortisation schedule above is so revealing: on a typical 30-year loan you can pay more in interest than the original loan amount if rates are high.
This tool estimates principal and interest only. Your actual monthly housing cost will also include property tax, homeowner’s insurance and, in the US, private mortgage insurance (PMI) if your down payment is under 20%. In the UK, the equivalent extras are buildings insurance and, for leasehold flats, service charges and ground rent. Budget for those separately — they can easily add 20–30% to the figure above.
First, a larger down payment shrinks the loan and can remove PMI entirely. Second, a shorter term — 15 years instead of 30 — usually comes with a lower rate and slashes total interest, though the monthly payment rises. Third, making even one extra payment a year attacks the principal early, when interest charges are at their highest. Try changing the term above from 30 to 15 years to see the difference; it is often six figures.
UK mortgages more commonly use 2- or 5-year fixed deals before reverting to a variable rate or being remortgaged, rather than a 30-year fix. The maths is identical — just set the term to your fixed-deal length to see payments during that period, and remember you will likely remortgage onto a new rate afterwards.
Amortisation is the process of paying off a loan through regular payments. Each payment covers that month’s interest first, and whatever is left reduces the loan balance — so over time, the interest portion shrinks and the principal portion grows.
A common guideline is the 28/36 rule: spend no more than 28% of gross monthly income on housing and 36% on all debt. Try our home affordability calculator for a personalised figure.
No — this calculator shows principal and interest only. Add roughly 1–2% of the home price per year for taxes and insurance in the US, or buildings insurance and service charges in the UK.
A 15-year loan has higher monthly payments but a lower rate and far less total interest. A 30-year loan costs more overall but keeps payments — and risk — lower. Many buyers choose 30 years and make extra payments when they can.
Increase your down payment, choose a longer term, buy a less expensive home, or secure a lower interest rate by improving your credit score and shopping among several lenders.
No — it shows principal and interest only, which keeps the maths transparent. To estimate your full monthly housing cost (PITI), add roughly one-twelfth of your annual property tax and homeowner’s insurance to the payment above. In the US, property tax averages around 1.1% of the home’s value per year and insurance about 0.35%, though both vary widely by state. Lenders use the full PITI figure when they apply the 28% affordability rule, so budget for it separately.