How to use
Enter the loan amount, the term in years and the interest rate. You get the monthly payment, the total interest and the total of all payments. Open “Amortization schedule by year” to see how much of each year’s payments goes to principal and to interest, and the balance left at the end of each year.
The starting numbers are only an example. Replace them with your own.
- Adjustable-rate mortgage (ARM): add a rate change, for example “from year 6 the rate is 8%” for a 5/1 ARM. You can add up to four changes to see different scenarios.
- Interest-only period: during these years you pay only interest. The principal is then repaid over the rest of the term, so the payment jumps when the period ends.
- Repayment type: almost every US mortgage uses a fixed monthly payment. Fixed principal (the payment starts high and falls every month) is shown for comparison.
How the payment is calculated
With a fixed monthly payment, each payment covers that month’s interest first, and the rest pays down the principal. Early payments are mostly interest; later ones are mostly principal.
Monthly payment = P × r × (1 + r)^n ÷ [(1 + r)^n − 1]
P is the loan amount, r is the monthly rate (annual rate ÷ 12) and n is the number of payments (years × 12).
When the rate changes, the payment is recalculated from the balance and the number of payments left, which is how an ARM resets.
Example
$400,000 for 30 years at 7.4%:
| Repayment type | Monthly payment | Total interest |
|---|---|---|
| Fixed monthly payment | about $2,770 | about $597,000 |
| Fixed principal | $3,578 in the first month, falling to $1,118 | about $445,000 |
A rate 0.25 points higher (7.65%) adds about $69 a month.
What this calculator leaves out
- Property tax, insurance and PMI: add them to the payment yourself. Your loan estimate lists them.
- Down payment: enter the amount you will borrow, not the home price.
- Extra payments: paying extra toward principal shortens the loan and cuts interest, but this page assumes you pay only the scheduled amount.