Mortgage Calculator
Work out what a mortgage really costs: the monthly payment, the interest paid over the term and how each instalment splits between interest and capital.
Monthly repayment
$1,334.00
300 payments over 25 years
Total interest
$160,199.38
Total repaid
$400,199.38
- Loan amount (price − deposit)
- $240,000.00
- Monthly rate used
- 0.375%
- Number of payments
- 300
- First payment — interest
- $900.00
- First payment — capital
- $434.00
- Total cost of the loan
- $460,199.38
How this was calculated
- 1.Borrow $240,000.00 after a $60,000.00 deposit.
- 2.Monthly rate i = 4.5% ÷ 12 = 0.375%.
- 3.Term n = 25 × 12 = 300 monthly payments.
- 4.M = P · i(1+i)ⁿ / ((1+i)ⁿ − 1) = $1,334.00 per month.
- 5.Over the term you repay $400,199.38, of which $160,199.38 is interest.
Figures assume a fixed rate with no arrangement fees, insurance or early-repayment charges.
How the mortgage calculation works
A repayment mortgage is an annuity: every month you pay the same amount, but the mix changes. Interest is charged on whatever balance is outstanding, so early payments are mostly interest and later payments are mostly capital.
The formula rearranges the present value of an annuity to solve for the payment. Because interest compounds monthly, the annual rate is divided by twelve and the term is multiplied by twelve.
Worked example
A $300,000 home with a $60,000 deposit over 25 years at 4.5%.
- →Loan amount = $300,000 − $60,000 = $240,000
- →Monthly rate = 4.5% ÷ 12 = 0.375%
- →Payments = 25 × 12 = 300
- →M = 240,000 × 0.00375 × 1.00375³⁰⁰ / (1.00375³⁰⁰ − 1)
Answer: Monthly repayment of about $1,334, with roughly $160,000 of interest over the full term.
Mortgage FAQs
Does a bigger deposit always reduce the monthly payment?
Yes — every dollar of deposit reduces the amount borrowed, so the payment falls. It also cuts the total interest, because interest is charged on a smaller balance from day one.
How much difference does a shorter term make?
A shorter term raises the monthly payment but sharply reduces total interest. Try the same figures with 15 and 30 years to see the trade-off, then check the loan repayment calculator for the total cost.
Why is more of my early payment interest than capital?
Interest is a percentage of the outstanding balance, which is at its highest at the start. As the balance falls, the interest portion shrinks and more of the same payment goes to capital.
Mortgage Calculator is part of the financial calculators collection on Calcora, alongside 8 other tools. Results are calculated in your browser and are for information only — see our disclaimer.
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