Mortgage Calculator
Calculate monthly payments, total interest, and view your full amortization schedule.
Inputs
Estimates only. Calculations do not constitute formal financial advice. Always consult a qualified professional before making financial commitments.
Results Summary
AMORTIZATION PROJECTION
AMORTIZATION SCHEDULE
| # | PAYMENT ($) | PRINCIPAL | INTEREST | BALANCE |
|---|---|---|---|---|
| 1 | 1,516.96 | 216.96 | 1,300.00 | 239,783.04 |
| 2 | 1,516.96 | 218.14 | 1,298.82 | 239,564.90 |
| 3 | 1,516.96 | 219.32 | 1,297.64 | 239,345.58 |
| 4 | 1,516.96 | 220.51 | 1,296.46 | 239,125.07 |
| 5 | 1,516.96 | 221.70 | 1,295.26 | 238,903.37 |
| 6 | 1,516.96 | 222.90 | 1,294.06 | 238,680.46 |
| 7 | 1,516.96 | 224.11 | 1,292.85 | 238,456.35 |
| 8 | 1,516.96 | 225.32 | 1,291.64 | 238,231.03 |
| 9 | 1,516.96 | 226.55 | 1,290.42 | 238,004.48 |
| 10 | 1,516.96 | 227.77 | 1,289.19 | 237,776.71 |
| 11 | 1,516.96 | 229.01 | 1,287.96 | 237,547.71 |
| 12 | 1,516.96 | 230.25 | 1,286.72 | 237,317.46 |
Methodology & Mathematical Formulas
To calculate the true cost of a mortgage, our tool utilizes the standard fixed-payment amortization system (Annuity). The calculation is not simply dividing the loan amount by the number of months. Financial institutions apply compound interest monthly to the remaining principal balance.
The exact formula to find the constant monthly payment (PMT) is:
- PMT: Monthly Payment
- P: Principal (Total loan amount)
- i: Monthly Interest Rate (Annual Rate / 12)
- n: Total Number of Months (Term in years × 12)
At the beginning of the term, the vast majority of your payment goes toward interest. As the principal balance shrinks over the years, the interest portion drops and the actual amortization portion grows. This is why borrowing costs explode on long-term contracts (e.g., 30 years).
Frequently Asked Questions
How is the monthly mortgage payment calculated?
Monthly payments use the standard annuity amortization formula: PMT = P * [i(1+i)^n] / [(1+i)^n - 1], where P is principal loan amount (Home Price minus Down Payment), i is monthly interest rate, and n is total payment count.
What is the difference between home price and loan amount?
The loan amount is the remaining balance to be financed after subtracting your down payment from the total home price. Interest accrues strictly on the loan amount.
How does the loan term impact total interest paid?
Longer terms reduce the monthly payment amount but significantly increase total interest charges over the life of the loan due to prolonged interest compounding.
How do extra principal prepayments reduce total mortgage duration?
Directing extra cash toward loan principal reduces the remaining interest-bearing balance, automatically shortening payoff duration and reducing total lifetime interest.
Using Prepayments to Your Advantage
Paying beyond the mandatory minimum installment is the most aggressive way to break the interest cycle. Any extra value paid applies directly to the Principal (P). Because the next month's interest is calculated solely on the remaining balance, paying down debt early guarantees exponential savings over decades.