Mortgage Calculator
Calculate your monthly mortgage payment and total interest cost. Enter your loan amount, interest rate, and term to see a full amortisation breakdown.
Monthly payment
$2,022.62
$320,000.00
Loan amount
$408,142.36
Total interest
$728,142.36
Total paid
LTV: 80.0% · 360 payments
How is a mortgage payment calculated?
A fixed-rate mortgage payment is calculated using the standard amortisation formula:
M = P × [r(1+r)â¿] ÷ [(1+r)⿠− 1]
Where M is the monthly payment, P is the principal loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments (years × 12).
Each monthly payment is the same amount, but the split between interest and principal changes over time. Early payments are mostly interest; later payments are mostly principal. This is the nature of amortisation.
What is loan-to-value (LTV) ratio?
LTV is the loan amount expressed as a percentage of the property value. A £200,000 loan on a £250,000 property has an LTV of 80%. Lenders use LTV to assess risk — a lower LTV typically means a lower interest rate and no requirement for private mortgage insurance (PMI) or lender's mortgage insurance (LMI).
Most lenders offer better rates below 80% LTV, with the best rates typically reserved for borrowers below 60% LTV.
Frequently asked questions
Does this include property taxes and insurance?
No. This calculator shows the principal and interest (P&I) portion of your payment only. Your actual monthly housing cost will also include property taxes, home insurance, and possibly PMI or HOA fees depending on your location and loan terms.
How much does paying extra each month save?
Extra principal payments reduce the loan balance faster, which means less interest accrues over time. Even small additional payments early in the loan can save tens of thousands over a 30-year term because of compounding interest savings.
What's the difference between a 15-year and 30-year mortgage?
A 15-year mortgage has higher monthly payments but typically a lower interest rate and dramatically less total interest paid — often less than half the interest of a 30-year loan. A 30-year mortgage has lower payments, freeing cash flow for other investments or expenses.
