Mortgage Calculator

When to use it

A mortgage is the largest regular payment most households make, and the headline rate hides most of the story: the term decides how much interest accumulates, and the down payment decides how much is borrowed in the first place. This page prices a repayment mortgage from those four numbers and shows the yearly split between principal and interest.

Use it to compare a 15-year and a 30-year offer, to test what a larger deposit does to the monthly figure, or to check whether a listing fits a budget. It estimates principal and interest only: property tax, buildings insurance, mortgage insurance and arrangement fees are not included, and the lender's own schedule and decision are what count.

How the maths works

Loan = price − down payment. The monthly rate r is the annual rate divided by 1,200, and n is the term in years times twelve. Payment = loan × r ÷ (1 − (1 + r)^−n). With a zero rate the payment is simply the loan divided by n, which is why an interest-free loan has no interest line at all.

Each payment covers that month's interest first, and the remainder reduces the balance, so early payments are mostly interest. The yearly table sums twelve of those months at a time.

A worked example

A 300,000 home with a 20% down payment, a 6% rate and a 30-year term.

1. Down payment: 300,000 × 20% = 60,000, leaving a loan of 240,000.
2. Monthly rate: 6 ÷ 1,200 = 0.005, and n = 360 payments.
3. Payment: 240,000 × 0.005 ÷ (1 − 1.005^−360) = 1,438.92.
4. Total repaid: 1,438.92 × 360 = 518,011.65, of which 278,011.65 is interest.

Terms compared

The last row is the same home with a 10% deposit instead of 20%: forty fewer thousand borrowed, yet the payment rises, because the loan grows. The 15-year row shows the trade in the other direction.

Common mistakes

• Typing the price as the loan. The down payment is subtracted first, so check the loan line in the result before reading the payment.
• Forgetting the extras. Tax, insurance and fees can add a meaningful monthly amount that this figure does not contain.
• Comparing payments instead of totals. A longer term lowers the payment and raises the interest; the total repayment line is the honest comparison.
• Treating the result as an offer. It is arithmetic. Affordability rules, credit checks and the lender's decision are what actually set the loan.

Keep exploring

• Loan Affordability Calculator — the same formula reversed, from payment to loan size.
• Loan Payment Calculator — the general version for car and personal loans.
• Compound Interest Calculator — why the balance falls slowly at first.
• Guide: How Loan Payments Work.