Home Loan Calculator – Mortgage Payment

A home loan is an amortizing mortgage: each fixed installment pays the month’s interest on the outstanding balance first, and whatever remains reduces the principal. The calculator applies the standard annuity formula with P as the amount borrowed, r the monthly rate and n the number of payments. Example: borrowing 850,000 at 6.75% for 25 years gives r = 0.005625 and n = 300, so the payment is 850,000 × 0.005625 × (1.005625)^300 ÷ ((1.005625)^300 − 1) ≈ 5,873 per month. Across 300 payments the home costs about 1,761,900 total — 911,900 of interest on top of the principal, more than the loan itself. Paying just 200 extra toward principal each month shortens the payoff by roughly 4.5 years and saves in the neighborhood of 160,000 in interest.

1. 1

   Step 1

   Enter the home price and your down payment to get the loan amount P.

2. 2

   Step 2

   Enter the annual interest rate and the term (15, 20, 25 or 30 years).

3. 3

   Step 3

   Read the monthly installment and the total interest over the full term.

4. 4

   Step 4

   Test extra monthly principal to see years and interest saved.

• Forgetting taxes and insurance

• Small down payment blindness

• Anchor on the rate only