MoneyMath

Mortgage Calculator

Calculate your monthly mortgage payment and see how much of every payment goes to interest versus principal. Includes a full amortization schedule.

£1,896.20 /month

  • Total paid over 30 years: £682,633.47
  • Total interest: £382,633.47
  • Principal: £300,000.00

How a mortgage payment is calculated

A standard fixed-rate mortgage payment uses the same formula used by every bank in the world. Given a loan amount P, monthly interest rate r (annual rate divided by 12), and total number of monthly payments n (years × 12), the monthly payment M is:

M = P · r / (1 − (1 + r)−n)

Worked example

Say you borrow £300,000 at 6.5% annual interest for 30 years. Convert the rate to monthly: 6.5% ÷ 12 = 0.5417% per month, or 0.005417 as a decimal. Total payments: 30 × 12 = 360.

Plug in: M = 300,000 × 0.005417 ÷ (1 − 1.005417−360) ≈ £1,896.20 per month. Over the full 30 years you'll pay about £682,633 — meaning £382,633 of that is pure interest. That's why paying down principal early or refinancing at a lower rate matters so much.

What this calculator does NOT include

Real mortgage payments usually bundle in property taxes, homeowners insurance, and sometimes private mortgage insurance (PMI) in the United States — collectively called “PITI”. In other countries the equivalents are different (council tax in the UK, community fees in Spain). The number above is principal + interest only. Expect your real monthly outflow to be 15–30% higher once taxes and insurance are included.

Fixed-rate vs adjustable-rate

This calculator assumes a fixed rate — the interest rate stays the same for the entire term. Adjustable-rate mortgages (ARMs) start with a fixed period, then reset against a benchmark like SOFR. To model an ARM, compute the fixed period at the introductory rate, then re-run the calculator with the remaining balance and a new rate for each reset period.

Disclaimer

This calculator is for educational purposes only. The numbers it produces are mathematical estimates that ignore fees, points, taxes, insurance, prepayment penalties, and credit-based rate adjustments. Get an official Loan Estimate from a licensed lender before making any decision.