Mortgage Interest Calculator
Calculate mortgage payments, total interest, and APR. Compare fixed and adjustable rates with detailed amortization schedules and fee analysis.
Mortgage Parameters
Amount of your mortgage loan
Remaining or original mortgage term
Annual interest rate
How lender computes interest on principal
Choose between fixed and adjustable interest rates
Mortgage Results
Mortgage Type: Fixed Rate
Compounding: Monthly (UK & US)
Total Periods: 240
Interest/Principal Ratio: 58.4%
Mortgage Analysis
Amortization Schedule
Yearly breakdown of mortgage payments showing interest and principal allocation:
| Year | Yearly Payment | Interest | Principal | Remaining Balance |
|---|---|---|---|---|
| 1 | $19,798.67 | $12,330.39 | $7,468.28 | $242,531.72 |
| 2 | $19,798.67 | $11,948.30 | $7,850.37 | $234,681.35 |
| 3 | $19,798.67 | $11,546.66 | $8,252.01 | $226,429.34 |
| 4 | $19,798.67 | $11,124.47 | $8,674.20 | $217,755.14 |
| 5 | $19,798.67 | $10,680.69 | $9,117.99 | $208,637.16 |
| 6 | $19,798.67 | $10,214.19 | $9,584.48 | $199,052.68 |
| 7 | $19,798.67 | $9,723.83 | $10,074.84 | $188,977.84 |
| 8 | $19,798.67 | $9,208.38 | $10,590.29 | $178,387.55 |
| 9 | $19,798.67 | $8,666.56 | $11,132.11 | $167,255.44 |
| 10 | $19,798.67 | $8,097.03 | $11,701.65 | $155,553.80 |
| 11 | $19,798.67 | $7,498.35 | $12,300.33 | $143,253.47 |
| 12 | $19,798.67 | $6,869.04 | $12,929.63 | $130,323.84 |
| 13 | $19,798.67 | $6,207.53 | $13,591.14 | $116,732.70 |
| 14 | $19,798.67 | $5,512.19 | $14,286.49 | $102,446.21 |
| 15 | $19,798.67 | $4,781.26 | $15,017.41 | $87,428.80 |
| 16 | $19,798.67 | $4,012.94 | $15,785.73 | $71,643.07 |
| 17 | $19,798.67 | $3,205.31 | $16,593.36 | $55,049.72 |
| 18 | $19,798.67 | $2,356.37 | $17,442.30 | $37,607.41 |
| 19 | $19,798.67 | $1,463.99 | $18,334.69 | $19,272.72 |
| 20 | $19,798.67 | $525.95 | $19,272.72 | $0.00 |
Schedule shows yearly totals: Interest (red) is the cost of borrowing, Principal (green) goes toward loan balance. Early years are mostly interest payments.
Example Calculation
15-Year Fixed Mortgage Example
Loan Amount: $200,000
Interest Rate: 3% annual
Term: 15 years
Compounding: Monthly
Results
Monthly Payment: $1,381.16
Total Interest: $48,609
Total Payments: $248,609
Interest Percentage: 24.3% of loan amount
First Month Breakdown
Interest Payment: $500 (principal × monthly rate)
Principal Payment: $881.16 (payment - interest)
Remaining Balance: $199,118.84
💡 Mortgage Tips
Interest Rate Impact
Even small rate differences significantly affect total interest costs
Loan Term Trade-offs
Shorter terms mean higher payments but lower total interest
APR vs Interest Rate
APR includes fees and gives true cost comparison
Points Consideration
Mortgage points can reduce rates but increase upfront costs
Mortgage Facts
Understanding Mortgage Interest
What is Mortgage Interest?
- •Definition: Cost of borrowing money to purchase a home
- •Calculation: Percentage of loan amount based on rate and term
- •Payment Structure: Mostly interest early, mostly principal later
- •Impact Factors: Rate, term, compounding frequency, fees
Mortgage Types
- •Fixed Rate: Interest rate stays same throughout term
- •Adjustable Rate (ARM): Rate changes after initial period
- •Interest-Only: Pay only interest for initial period
- •Balloon: Large final payment due at end
Mortgage Interest Formulas
Monthly Payment Formula
M: Monthly payment
P: Principal loan amount
r: Monthly interest rate (annual rate ÷ 12)
n: Total number of payments
Monthly Interest Formula
Monthly Rate: Annual rate ÷ 12
Remaining Balance: Principal not yet paid
Principal Payment: Total payment - Interest
New Balance: Previous balance - Principal payment
Frequently Asked Questions
Why is it important to know about mortgage interest?
Understanding mortgage interest is crucial because it affects the entire cost of your home loan. Knowing how interest is calculated helps you make better financial decisions and potentially save money through refinancing, extra payments, or choosing the right loan terms.
Can I reduce my mortgage interest payment?
Yes, you can reduce mortgage interest by making extra principal payments, refinancing to a lower rate, choosing a shorter loan term, or paying bi-weekly instead of monthly. Each strategy has different benefits and considerations.
What factors affect my expected mortgage interest?
Key factors include your credit score, loan amount, down payment size, loan term, mortgage type, and current market conditions. Economic factors like inflation and Federal Reserve policies also influence mortgage rates.
How do I calculate monthly mortgage interest?
To calculate monthly mortgage interest: (1) Check your exact principal balance, (2) Determine the monthly interest rate (annual rate ÷ 12), (3) Multiply the principal balance by the monthly rate. The result is your interest payment for that month.