What this calculator tells you
Three numbers matter when you compare loans, and lenders usually advertise only the first.
The monthly payment is what leaves your account. It is the number that decides whether a loan is affordable month to month, and the one every advertisement leads with.
The total interest is what the loan actually costs you. It is the number that is easiest to hide: stretching a 25-year term to 35 years lowers the monthly figure and can add a six-figure sum to the total. Always read the two together.
The amortization schedule shows where each payment goes. On a typical 30-year loan at 6.5%, roughly three quarters of your first year's payments are pure interest. That is not a trick — interest is charged on the outstanding balance, which starts at its maximum — but it explains why the balance barely moves early on, and why overpaying early is worth so much more than overpaying late.
Extra payments: the largest lever you control
You cannot negotiate much on rate, and the term is usually fixed at signing. Extra payments are the one variable fully in your hands. Because every extra amount goes straight to principal, it cancels all the future interest that principal would have accrued.
Try it above: on a $320,000 loan at 6.5% over 30 years, an extra $200 a month removes roughly five years and around $100,000 of interest. The lever is real, and it is entirely front-loaded — the same $200 started in year fifteen saves a fraction of that.
A note on rates
The rate you enter should be the APR, which folds in lender fees, rather than the headline rate. Two loans with identical headline rates can differ materially once arrangement fees, valuation costs and insurance requirements are included. If you are comparing offers, compare APRs.
Frequently asked questions
How is a monthly mortgage payment calculated?
A repayment mortgage uses the annuity formula M = P x [r(1+r)^n] / [(1+r)^n - 1], where P is the amount borrowed, r the monthly interest rate and n the total number of payments. The payment stays level, but its split shifts: early payments are mostly interest, later ones mostly principal.
Does a bigger down payment always save money?
On interest, yes - you borrow less, so you pay less. But cash tied up in property is not available for emergencies or for investments that may return more than your mortgage rate. Compare both scenarios before committing.
Why does a small extra payment cut years off the loan?
Extra payments go entirely to principal, so they also remove every future interest charge that principal would have generated. The effect compounds, which is why an extra amount paid in year two matters far more than the same amount paid in year twenty.
Should property tax and insurance be included?
That depends on where you live. In the US, Canada, the UK and Australia lenders commonly escrow both into one monthly payment. In India and most of Asia the figure people quote is the EMI - principal and interest only. This calculator defaults to whichever convention matches your currency.