Mortgage Interest Calculator
See interest cost over time, first-payment interest, and interest savings with extra payments.
| # | Date | Payment | Principal | Interest | Balance |
|---|---|---|---|---|---|
| Run a calculation to see the schedule. | |||||
Use this Mortgage Interest Calculator to estimate your monthly principal-and-interest payment, total mortgage interest, and the potential interest savings from making extra monthly principal payments.
Important: This calculator focuses on principal and interest. Property taxes, homeowners insurance, mortgage insurance, HOA fees, and other housing costs are not included.
Mortgage Interest Calculation Method
For a fixed-rate mortgage, first convert the annual interest rate to a monthly rate:
Monthly rate = annual interest rate ÷ 12 ÷ 100
The scheduled monthly principal-and-interest payment is:
Monthly payment = P × [r(1 + r)n] ÷ [(1 + r)n − 1]
Where:
- P = mortgage principal
- r = monthly interest rate
- n = total number of monthly payments
Interest is calculated on the remaining balance each month:
Monthly interest = current balance × monthly interest rate
Principal paid = monthly payment − monthly interest
Total interest = total scheduled payments − original principal
If an extra monthly payment is entered, the calculator applies it toward principal in the estimate. Reducing the balance faster lowers future interest and can shorten the payoff period.
Example
Suppose you borrow $280,000 at a 6.5% fixed interest rate for 30 years.
Estimated monthly principal and interest = $1,769.79
The first month’s estimated interest is:
$280,000 × (6.5% ÷ 12) ≈ $1,516.67
Without extra payments:
Estimated total interest ≈ $357,124.57
If an additional $200 per month is consistently applied to principal, the calculator estimates total interest of about $255,841.38, a reduction of approximately $101,283.19. The payoff period also falls to about 273 months instead of 360 months.
Important Notes
- Use the mortgage interest rate, not APR, for a basic principal-and-interest amortization calculation.
- APR may include certain fees and other loan costs, so it is useful for broader mortgage-offer comparisons.
- Early in a typical fixed-rate mortgage, a larger share of each payment goes toward interest. More goes toward principal as the balance decreases.
- Extra-payment savings assume the additional amount is consistently applied directly to principal.
- Confirm with your mortgage servicer how additional payments are applied and whether your loan has any prepayment restrictions or penalties.
- Taxes, homeowners insurance, mortgage insurance, HOA fees, closing costs, and escrow adjustments are not included.
- Adjustable-rate, interest-only, balloon, and other nonstandard mortgages may not follow this fixed-rate calculation.