How your mortgage payment is calculated
Every fixed-rate mortgage uses the same standard amortization formula. Your monthly payment is set at a level that exactly repays the loan — principal plus interest — over the agreed term at the given rate. Early payments go mostly to interest; later payments go mostly to principal.
On a $300,000 loan at 6% for 30 years, the monthly payment is $1,798.65 and you pay $347,515 in total interest over the life of the loan. That is more than the original loan amount — the price of borrowing at 6% for three decades.
The calculator above is set to mortgage-sized defaults. Enter your actual numbers to see your exact payment and schedule. UK and Australian borrowers: switch the currency to GBP or AUD using the switcher in the input panel — the vocabulary updates to match your market (“repayment” instead of “payment”, etc.).
What drives your mortgage payment — and what you can control
Three numbers determine your payment: loan amount, interest rate, and term. Of these, the loan amount has the biggest lever — each $10,000 more or less on a $300,000 / 6% / 30-year mortgage changes the payment by about $60/month.
Rate matters less per unit than most borrowers expect. A 1% rate increase on $300,000 over 30 years adds about $180/month — significant, but less than a $30,000 larger loan. The term matters most for total interest: a 15-year mortgage at the same rate costs roughly half the interest of a 30-year, though the monthly payment is about 45% higher.
What you can control before closing: your down payment (lowers the principal), your credit score (lowers the rate), and your choice of term. After closing, extra principal payments are the most powerful tool — even $200/month extra on a 30-year mortgage cuts about 6 years 9 months from the term and saves $91,173 in interest on a $300,000 / 6% loan (Fixture B, verified).
Principal and interest vs total housing cost
This calculator shows the principal-and-interest (P&I) portion of your payment — the amount that goes to your lender each month. Your actual monthly housing cost is higher if your lender escrows taxes and insurance into the payment.
A rough estimate for US borrowers: add 1–2% of the home value per year for property taxes, and 0.5–1% per year for homeowner’s insurance. On a $400,000 home, that is $333–$1,000 per month on top of your P&I. PMI (private mortgage insurance) adds another 0.5–1.5% annually if your down payment was below 20%.
For UK and Australian borrowers, the equivalent is buildings insurance and any mortgage protection insurance your lender requires. The P&I calculation is identical regardless of market — only the add-ons differ.
Want to save on your mortgage?
Use the mode tabs above to explore:
- Payoff accelerator — see how extra monthly payments or a lump sum cut your interest and payoff date.
- Refinance comparison — compare your current rate to a new rate and find your break-even month.
- 15 vs 30 year — side-by-side payment and interest comparison for any two terms.
Frequently asked questions
How do I calculate my monthly mortgage payment?
The formula is M = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the loan principal, r is the monthly rate (annual rate ÷ 12), and n is the number of monthly payments. On a $300,000 loan at 6% for 30 years, this gives $1,798.65 per month. The calculator above runs this instantly for any combination of loan amount, rate, and term.
What is included in a mortgage payment?
A standard mortgage payment (sometimes called PITI) covers Principal (reducing your balance), Interest (the lender's cost for the loan), Taxes (property tax, typically escrowed), and Insurance (homeowner's insurance and PMI if your down payment was under 20%). This calculator shows the P+I portion — the part that goes to your lender. Add your estimated tax and insurance to get the full monthly housing cost.
How does a 15-year mortgage compare to a 30-year mortgage?
A 15-year mortgage has a higher monthly payment but dramatically lower total interest — typically 0.5–0.75% lower rate plus a shorter repayment period. On $300,000 at 6%, a 30-year loan costs $347,515 in total interest; a 15-year loan at 5.5% costs roughly $142,000 — saving over $200,000. Use the "Compare terms" mode to run this comparison for your actual loan.
What is the difference between a mortgage payment and a mortgage repayment?
In the US and Canada, the monthly cost is called a mortgage payment. In the UK and Australia, the same thing is called a mortgage repayment. The math is identical — both refer to the fixed monthly amount you pay your lender to clear the loan over the agreed term. This calculator works the same regardless of which term your country uses.
How much mortgage can I afford based on my income?
A common rule of thumb is to keep your total monthly housing cost (principal, interest, taxes, and insurance) at or below 28% of your gross monthly income. On a $6,000/month gross income, that is $1,680/month. At 6.5% for 30 years, $1,680/month supports a loan of roughly $266,000. Affordability calculators (which factor in your other debts, down payment, and credit score) give a more precise figure — use this calculator to find the payment for any loan amount.