Mortgage Calculator

Calculate monthly payment, total interest paid and full amortisation schedule for any home loan.

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Formulas

M = P × r(1+r)ⁿ / ((1+r)ⁿ−1)
P = Principal
r = monthly rate (annual/12)
n = total months

How to use?

  1. 1
    Enter loan detailsEnter the loan amount, annual interest rate and loan term in years.
  2. 2
    Click CalculateMonthly payment, total interest and total repayment appear instantly.
  3. 3
    Review the scheduleThe principal vs. interest breakdown shows how much of each payment goes toward reducing your debt versus paying interest.

FAQ

How is the monthly mortgage payment calculated?
Monthly payment = P × r(1+r)ⁿ / ((1+r)ⁿ − 1), where P = principal, r = monthly rate (annual rate ÷ 12), n = total months. This formula gives a fixed monthly payment that covers both interest and principal.
Why is total interest often very high?
Long loan terms (20–30 years) mean interest accumulates for decades. For a 30-year loan at 5%, you'll pay roughly 86% of the original loan amount again in interest. Making extra payments early dramatically reduces total interest.
What is amortisation?
Amortisation is the gradual repayment of a loan over time through regular payments. Each payment covers the interest for that period first; the remainder reduces the principal. Early payments are mostly interest; later payments are mostly principal.

How Mortgages Work

A mortgage is a loan secured against property. The borrower repays the loan plus interest through regular monthly payments over an agreed term — typically 10–30 years. The monthly payment is calculated using the annuity formula to ensure equal payments throughout the term.

The Amortisation Formula

Monthly payment = P × r(1+r)ⁿ / ((1+r)ⁿ − 1), where P = principal, r = monthly interest rate (annual ÷ 12), n = total months. In early payments most of the amount covers interest; as the principal decreases, a larger share goes toward paying it off.

Reducing Total Interest Paid

  • Shorter term: A 15-year loan pays far less total interest than a 30-year loan, though monthly payments are higher.
  • Extra payments: Paying extra principal early reduces the remaining balance on which interest accrues.
  • Lower rate: Even 0.5% lower rate over 25 years can save tens of thousands.

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