Mortgage Interest Calculator
Calculate monthly mortgage payments and total interest costs. Compare loan terms and see amortisation schedules.
Repayment Summary
Monthly Repayment
$3,160
Loan Amount
$500,000
Total Interest
$637,722
Total Repaid
$1,137,722
View amortisation schedule
| Year | Balance | Principal Paid | Interest Paid |
|---|---|---|---|
| 1 | $494,411.37 | $5,588.63 | $32,335.45 |
| 2 | $488,448.46 | $11,551.54 | $64,296.63 |
| 3 | $482,086.21 | $17,913.79 | $95,858.45 |
| 4 | $475,297.86 | $24,702.14 | $126,994.19 |
| 5 | $468,054.89 | $31,945.11 | $157,675.29 |
| 6 | $460,326.84 | $39,673.16 | $187,871.32 |
| 7 | $452,081.22 | $47,918.78 | $217,549.79 |
| 8 | $443,283.39 | $56,716.61 | $246,676.04 |
| 9 | $433,896.34 | $66,103.66 | $275,213.08 |
| 10 | $423,880.63 | $76,119.37 | $303,121.45 |
| 11 | $413,194.15 | $86,805.85 | $330,359.04 |
| 12 | $401,791.97 | $98,208.03 | $356,880.95 |
| 13 | $389,626.17 | $110,373.83 | $382,639.23 |
| 14 | $376,645.61 | $123,354.39 | $407,582.75 |
| 15 | $362,795.71 | $137,204.29 | $431,656.93 |
| 16 | $348,018.25 | $151,981.75 | $454,803.56 |
| 17 | $332,251.13 | $167,748.87 | $476,960.51 |
| 18 | $315,428.05 | $184,571.95 | $498,061.51 |
| 19 | $297,478.29 | $202,521.71 | $518,035.84 |
| 20 | $278,326.41 | $221,673.59 | $536,808.04 |
| 21 | $257,891.89 | $242,108.11 | $554,297.60 |
| 22 | $236,088.84 | $263,911.16 | $570,418.63 |
| 23 | $212,825.59 | $287,174.41 | $585,079.47 |
| 24 | $188,004.36 | $311,995.64 | $598,182.32 |
| 25 | $161,520.81 | $338,479.19 | $609,622.85 |
| 26 | $133,263.60 | $366,736.40 | $619,289.72 |
| 27 | $103,113.96 | $396,886.04 | $627,064.16 |
| 28 | $70,945.14 | $429,054.86 | $632,819.42 |
| 29 | $36,621.92 | $463,378.08 | $636,420.28 |
| 30 | $0.00 | $500,000.00 | $637,722.44 |
About this calculator
This calculator uses a standard amortising loan formula with monthly compounding. Actual repayments may vary based on your lender's calculation method, fees, and rate changes. Extra repayments are applied monthly to the principal balance.
How mortgage payments work
A mortgage payment consists of two components: principal and interest. In the early years, most of your payment goes toward interest. As the loan matures, more goes toward principal -this is called amortisation.
On a 30-year $400,000 mortgage at 6%, your first payment might be $2,398, with $2,000 going to interest and only $398 to principal. By year 25, those proportions reverse.
The mortgage payment formula
Monthly mortgage payments are calculated using:
M = P × [r(1+r)^n] / [(1+r)^n – 1]
Where:
- M = Monthly payment
- P = Principal (loan amount)
- r = Monthly interest rate (annual rate / 12)
- n = Total number of payments (years × 12)
How interest rates affect payments
Small rate differences have significant long-term impacts:
| Loan Amount | Rate | Monthly Payment | Total Interest |
|---|---|---|---|
| $400,000 | 5% | $2,147 | $373,023 |
| $400,000 | 6% | $2,398 | $463,353 |
| $400,000 | 7% | $2,661 | $558,036 |
A 1% rate increase on a $400,000 loan costs an additional $90,000+ over the life of the loan.
Loan term comparison
Shorter terms mean higher monthly payments but dramatically lower total interest:
| Term | Monthly Payment | Total Interest | Total Paid |
|---|---|---|---|
| 30 years | $2,398 | $463,353 | $863,353 |
| 20 years | $2,866 | $287,840 | $687,840 |
| 15 years | $3,375 | $207,586 | $607,586 |
Based on $400,000 loan at 6%
A 15-year mortgage saves over $255,000 in interest compared to a 30-year loan.
Principal vs interest over time
Early in a mortgage, interest dominates your payment:
Year 1 of a 30-year loan at 6%:
- Total payments: $28,776
- Interest paid: ~$23,900
- Principal paid: ~$4,876
Year 25 of the same loan:
- Total payments: $28,776
- Interest paid: ~$6,200
- Principal paid: ~$22,576
This shift happens because interest is calculated on the remaining balance, which decreases as you pay down principal.
Extra payments
Making extra payments toward principal can save substantial interest:
$100 extra monthly on a $400,000, 30-year loan at 6%:
- Pay off 4 years early
- Save ~$62,000 in interest
One extra payment per year (paying biweekly instead of monthly):
- Pay off 5 years early
- Save ~$72,000 in interest
Even small additional payments early in the loan have outsized effects due to the compounding nature of interest calculations.
Fixed vs variable rates
Fixed rate - Interest rate stays constant for the entire loan term. Payments are predictable but may start higher than variable rates.
Variable rate - Interest rate adjusts periodically based on market conditions. May start lower but carries risk if rates rise.
In Australia, variable rates are common and often come with offset account features. In the US, 30-year fixed mortgages dominate the market.
What affects your mortgage rate?
- Credit score - Higher scores qualify for lower rates
- Deposit size - Larger deposits (lower LVR) mean lower rates
- Loan type - Fixed, variable, interest-only all carry different rates
- Property type - Investment properties typically have higher rates
- Loan amount - Jumbo loans may have different rate structures
How this tool works
Enter your loan amount, interest rate, and loan term to calculate monthly payments and total interest. The calculator shows your complete payment breakdown and amortisation summary. Powered by a QuantCDN Edge Function.