Mortgage Interest Calculator

See how much of your mortgage payment goes to interest each year, your total lifetime interest, and how extra principal payments cut interest and shorten the loan.

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Results will appear here once you enter your values.

Why Early Payments Are Mostly Interest

Each month the lender charges interest on the balance you still owe: interest = balance × (annual rate ÷ 12).

Your payment is fixed, so whatever is left after interest goes to principal.

At the start the balance is highest, so interest takes the biggest bite.

On a $300,000 loan at 6.5%, the first payment of $1,896.20 includes $1,625.00 of interest and only $271.20 of principal.

The balance shrinks slowly at first, then faster, which is why the principal column in the yearly table grows every year.

Worked Example: $300,000 at 6.5% for 30 Years

The monthly payment is $1,896.20, so 360 payments total $682,633.47.

Subtract the $300,000 borrowed and lifetime interest is $382,633.47, more than the loan itself.

In year 1 you pay $19,401.27 of interest.

Across the first five years, $94,605.18 of the $113,772 you pay, about 83.2%, is interest.

The table shows each year's split and the balance at year end, and the interest and principal columns add up exactly to the totals.

What Extra Principal Payments Do

Money paid above the required payment goes straight to principal, so every later month charges interest on a smaller balance.

Adding $200 a month to the example loan pays it off in 277 months instead of 360, 6 years and 11 months sooner, and cuts lifetime interest to $279,184.67, a saving of $103,448.79.

Extra payments made early in the loan save the most because they remove principal that would otherwise accrue interest for decades.

Check that your servicer applies extra money to principal and that your loan has no prepayment penalty.

Mortgage Interest and Your Taxes

If you itemize deductions, home mortgage interest may be deductible.

For mortgages taken out after December 15, 2017, IRS Publication 936 limits the deduction to interest on the first $750,000 of home acquisition debt ($375,000 if married filing separately).

Many homeowners take the standard deduction instead, in which case the interest brings no tax benefit.

This calculator shows principal and interest only; property taxes, homeowners insurance and mortgage insurance are separate costs.

Frequently Asked Questions

Common questions about the Mortgage Interest Calculator

Multiply the monthly payment by the number of payments and subtract the loan amount. A $300,000 loan at 6.5% for 30 years has a $1,896.20 payment, 360 payments totaling $682,633.47, and $382,633.47 of interest.

Sources & References

What is amortization and how could it affect my loan?

How each fixed payment splits between interest and principal, the basis of the payment, balance and interest formulas used here.
→Source: Consumer Financial Protection Bureau

Publication 936: Home Mortgage Interest Deduction

Deductible home mortgage interest is limited to the first $750,000 of home acquisition debt ($375,000 married filing separately) for mortgages taken out after December 15, 2017.
→Source: Internal Revenue Service

What is a prepayment penalty?

Check your loan documents for a prepayment penalty before making a large principal payment or recast request.
→Source: Consumer Financial Protection Bureau

Buying a House: tools and resources

Comparing mortgage costs, rates and loan terms.
→Source: Consumer Financial Protection Bureau

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