Mortgage calculator

How this mortgage calculator works

This calculator uses the standard amortization formula used by banks in the United States and the United Kingdom. Enter your loan amount, annual interest rate and term in years, and it instantly shows your fixed monthly repayment, the total interest you'll pay over the life of the loan, and a principal-vs-interest breakdown.

Every fixed-rate repayment mortgage follows the same shape: early payments are mostly interest, and later payments are mostly principal. Over a 30-year loan, the crossover point — where more of your payment starts going to principal than interest — typically lands somewhere around year 15–18, depending on your rate.

Worked example: $350,000 at 6.5% over 30 years

Take a $350,000 loan at a 6.5% annual rate over a 30-year term. Plugging those numbers into the amortization formula M = P × r(1+r)ⁿ / ((1+r)ⁿ − 1):

• Monthly rate (r): 6.5% ÷ 12 = 0.5417% (0.005417)
• Number of payments (n): 30 × 12 = 360
• Monthly payment (M): $2,212
• Total paid over 30 years: $2,212 × 360 = $796,406
• Total interest paid: $796,406 − $350,000 = $446,406

Notice the total interest ($446,406) is actually higher than the loan amount itself ($350,000) — that's typical for a 30-year term at this rate, and it's exactly why the term length and rate matter as much as the loan size.

Monthly payment by loan amount

Estimated monthly principal & interest payment at a 6.5% fixed rate. Use this to sanity-check the calculator above at a different loan size.

Loan amount	15-year @ 6.5%	30-year @ 6.5%
$200,000	$1,742	$1,264
$250,000	$2,178	$1,580
$300,000	$2,613	$1,896
$350,000	$3,049	$2,212
$400,000	$3,484	$2,528
$500,000	$4,356	$3,160
$600,000	$5,227	$3,792
$750,000	$6,533	$4,741

Mortgage components explained

• Principal — the amount you actually borrowed (home price minus down payment).
• Interest rate — the annual cost of borrowing, expressed as a percentage (APR incorporates fees too — useful for comparing lenders).
• Term — how many years you have to repay. Shorter terms mean higher monthly payments but far less total interest.
• Down payment — cash paid upfront. In the US, putting down less than 20% usually triggers PMI (private mortgage insurance); in the UK, a bigger deposit unlocks better rate tiers.

What the amortization schedule looks like

Using the same $350,000 / 6.5% / 30-year example, here's the remaining balance and cumulative principal paid at key milestones:

Year	Remaining balance	Principal paid so far
1	$346,088	$3,912
5	$327,638	$22,362
10	$296,716	$53,284
15	$253,957	$96,043
20	$194,828	$155,172
30	$0	$350,000

Notice how slowly the balance drops in the first 10 years compared to the last 10 — that's the interest-front-loading effect described above.

15-year vs 30-year mortgage

Same $350,000 loan at 6.5%, two different terms:

Metric	15-year	30-year
Monthly payment	$3,049	$2,212
Total interest paid	$198,798	$446,406
Total cost	$548,798	$796,406

The 15-year term costs $837 more per month but saves $247,608 in interest over the life of the loan. Whether that trade-off makes sense depends on whether you can comfortably absorb the higher payment — a 30-year term with extra payments when affordable gives you the flexibility to fall back to the lower minimum in a tight month, which a 15-year term's higher required payment doesn't.

What this calculator does not include

The result above is principal and interest (P&I) only. Your actual monthly housing payment will typically be higher once you add:

• Property tax — varies widely by US county/UK council; often escrowed into the monthly payment by US lenders.
• Homeowners insurance (US) / buildings insurance (UK) — required by nearly all mortgage lenders.
• PMI (private mortgage insurance) — US only, usually required when the down payment is under 20%.
• HOA fees — if the property is in a homeowners association or a UK leasehold with service charges.

Add these to the P&I figure above to estimate your true total monthly housing cost.

Tips to lower your monthly payment

• A longer term lowers the monthly payment but increases total interest.
• Even a 0.5% lower rate can save thousands over a 30-year term.
• A larger deposit (down payment) reduces both payment and interest.
• Making one extra payment a year can shave several years off a 30-year term — see our compound interest calculator to model overpayments.

US vs UK mortgages: what's different

• Rate structure — US buyers typically fix the rate for the full term (e.g. 30 years). UK buyers usually take a 2–5 year fixed or tracker deal, then remortgage onto a new rate — so a UK "30-year mortgage" often means 30-year repayment period across several shorter rate deals, not one fixed rate throughout.
• Upfront tax — UK buyers pay Stamp Duty Land Tax on purchase (see our Stamp Duty calculator); US buyers instead pay closing costs and, in many states, transfer taxes.
• Typical term — 30 years is standard in the US; 25 years is more common in the UK, though 30–35 year terms are increasingly available.
• Mortgage insurance — US PMI applies below 20% down; the UK has no direct equivalent, but a smaller deposit pushes you into a higher, less competitive loan-to-value rate tier.

Frequently asked questions

How is a monthly mortgage payment calculated?

The payment uses the amortization formula M = P × r(1+r)ⁿ / ((1+r)ⁿ − 1), where P is the loan amount, r the monthly rate and n the number of payments.

Does this work for UK mortgages?

Yes — the repayment formula is identical. Just enter pounds instead of dollars, and remember UK buyers should also check Stamp Duty separately since it's not included in the monthly payment.

Are taxes and insurance included?

No. Results show principal and interest only; property tax, homeowners/buildings insurance, PMI and HOA fees vary by lender and location and are not included — see "What this calculator does not include" above.

Why does most of my early payment go to interest?

Interest is charged on the remaining balance, which is highest at the start. As the balance shrinks, less of each payment goes to interest and more goes to principal — this is why the donut above shifts over the life of the loan.

Should I choose a 15-year or 30-year mortgage?

A 15-year term costs more per month but saves a large amount in total interest — on a $350,000 loan at 6.5%, roughly $247,600. Choose 15-year if the higher payment is comfortably affordable; choose 30-year for lower required payments with the option to overpay when you can.

What credit score do I need for the best mortgage rate?

In the US, scores above 740 generally unlock the best conventional rates; in the UK, lenders use a wider range of affordability and credit-history checks rather than a single score. Either way, a stronger credit profile typically means a lower rate than the example used in this calculator.

Can I pay off my mortgage early?

Usually yes, though some lenders charge an early repayment charge (UK) or prepayment penalty (US, less common today) during an initial period — check your mortgage offer. See the "Tips to lower your monthly payment" section above for how extra payments affect the total.

What's the difference between APR and the interest rate?

The interest rate is the base cost of borrowing. APR (Annual Percentage Rate) folds in lender fees and other costs, giving a more complete number for comparing offers between lenders — always compare APR, not just the headline rate.