Total interest
$585,266
Work out the monthly principal-and-interest payment on a fixed-rate mortgage, the total interest you will pay over the life of the loan, and how much of your first payment actually reduces the balance.
Figures are principal and interest only. Property tax, homeowners insurance, mortgage insurance and HOA dues are collected separately, usually into escrow, and appear in no number on this page.
| Month | Payment | To principal | To interest | Balance |
|---|---|---|---|---|
| 1 | $2,736.85 | $310.18 | $2,426.67 | $399,690 |
| 2 | $2,736.85 | $312.06 | $2,424.78 | $399,378 |
| 3 | $2,736.85 | $313.96 | $2,422.89 | $399,064 |
| 4 | $2,736.85 | $315.86 | $2,420.99 | $398,748 |
| 5 | $2,736.85 | $317.78 | $2,419.07 | $398,430 |
| 6 | $2,736.85 | $319.71 | $2,417.14 | $398,110 |
| 7 | $2,736.85 | $321.65 | $2,415.20 | $397,789 |
| 8 | $2,736.85 | $323.60 | $2,413.25 | $397,465 |
| 9 | $2,736.85 | $325.56 | $2,411.29 | $397,140 |
| 10 | $2,736.85 | $327.54 | $2,409.31 | $396,812 |
| 11 | $2,736.85 | $329.52 | $2,407.33 | $396,483 |
| 12 | $2,736.85 | $331.52 | $2,405.33 | $396,151 |
The payment comes from the standard amortizing-loan formula. Interest accrues on the outstanding balance each month, and the payment is set so the balance reaches exactly zero at the end of the term. Because the payment is fixed while the balance falls, the split between interest and principal changes every month even though the payment itself does not.
M — monthly principal and interest paymentL — original loan amount, that is the amount borrowed and not the purchase pricer — monthly interest rate, the annual rate divided by 12n — total number of monthly payments, which is the term in years multiplied by 12Interest for a given month is the balance at the start of that month multiplied by r. Whatever remains of the payment after interest reduces principal. That single sentence explains everything else on this page.
The figure above is principal and interest. Those are the two components tied directly to the loan itself, and they are the two a lender uses to qualify you. The amount that actually leaves your account each month is usually larger, because other items are bundled into the same payment and held in escrow.
| Component | Set by | In this calculator |
|---|---|---|
| Principal | Loan amount and repayment schedule | Yes |
| Interest | Rate and outstanding balance | Yes |
| Property tax | Local assessed value and millage rate | No |
| Homeowners insurance | Coverage level and insurer | No |
| Mortgage insurance | Down payment below 20% on a conventional loan | No |
| HOA or condo dues | The association's own schedule | No |
Two of those deserve a warning rather than a mention. Property tax is not a fixed cost: it is reassessed, and in many jurisdictions it is reassessed upward after a sale, so the first year's escrow can understate every year that follows. Mortgage insurance, where it applies, is usually the largest single addition to a payment and it disappears only when the loan-to-value ratio falls enough, which under a standard schedule takes years.
A useful habit is to compute this page's figure and then add your own estimate of the excluded items. The sum is your real monthly outflow. Comparing the two numbers is how you find out whether a house is affordable or merely financeable.
On the default inputs — $400,000 at 7.28% over 30 years — the payment is $2,736.85 and the interest portion of the first instalment is $2,426.67. That is 88.67% of the payment. Only $310.18 reduces the balance in month one.
Nothing is wrong with the arithmetic. Interest is charged on the balance, and in month one the balance is at its highest. The payment is set at a level that clears the loan in exactly 360 months, so the early payments are dominated by the cost of the money and the late ones are dominated by repayment.
The practical consequence is that the schedule is asymmetric, and the asymmetry is the reason a second mortgage taken out in year two behaves differently from the first one taken out in year one. It is also why a homeowner who sells in year three has repaid almost nothing, and why the same loan at a shorter term costs so much less in total: the balance falls roughly twice as fast, so far less interest accrues on it.
The twelve rows printed under the calculator are there for exactly this reason. They make the asymmetry visible in about ten seconds, which is faster than reading any explanation of it.
The three inputs are not equally powerful, and the difference matters when you are choosing what to negotiate. The table below holds the loan at $400,000 and crosses three rates against three terms.
| Term | 6.50% | 7.28% | 8.00% |
|---|---|---|---|
| 15 years | $3,484 / $227,197 | $3,658 / $258,479 | $3,823 / $288,070 |
| 20 years | $2,982 / $315,750 | $3,169 / $360,507 | $3,346 / $402,982 |
| 30 years | $2,528 / $510,178 | $2,737 / $585,266 | $2,935 / $656,621 |
Monthly principal and interest / total interest over the full term
Read across the 30-year row and the rate matters a great deal: moving from 6.50% to 8.00% adds $407 a month and $146,443 of interest on the same $400,000. Read down the 7.28% column and the term matters even more, but in opposite directions on the two figures: shortening from 30 years to 15 raises the monthly payment by $921 and cuts total interest by $326,787.
The one input that changes neither figure in a surprising way is the loan amount, because both the payment and the total interest scale with it almost exactly in proportion. Doubling the amount roughly doubles both. That is worth knowing, because it means the term and the rate are the two levers, and the loan amount is simply a decision about how much house you are buying.
Everything on this page is reproducible with a calculator and the formula above. For the default inputs, the monthly rate is 7.28 ÷ 100 ÷ 12, which is 0.00606667, and the number of payments is 30 × 12, which is 360.
Month one interest is 400,000 × 0.00606667 = 2,426.67. Subtract that from the payment and $310.18 goes to principal, leaving a balance of $399,689.82. Month two interest is 399,689.82 × 0.00606667 = 2,424.79, so slightly more of that payment reaches principal. Rows two through twelve in the table above follow the same two lines of arithmetic.
If your own calculation differs by a few cents rather than a few dollars, the cause is almost always rounding order. If it differs by more, one of the two implementations is wrong and we would like to know: the corrections page explains how to report it.
This calculator computes principal and interest only. A payment you actually make usually also collects property tax, homeowners insurance and, where applicable, mortgage insurance and HOA dues, normally through an escrow account. Those items are set by third parties rather than by the loan, so they are excluded here and stated as excluded rather than estimated.
In total interest, yes, and by a wide margin. A 15-year loan at 7.28% on $400,000 costs $258,479 in interest against $585,266 over 30 years at the same rate. The trade-off is the required monthly payment, which rises from $2,737 to $3,658. Lower total cost, more mandatory cash each month: change the term field and watch the two numbers move in opposite directions.
Interest is charged on the outstanding balance, and the balance is at its largest in month one. At 7.28% on $400,000 the first month's interest alone is $2,426.67, which is 88.67% of the $2,736.85 payment. By the final year the balance is small enough that almost the entire payment goes to principal. The pattern is a consequence of the formula, not a feature of any particular lender.
They are not interchangeable and the calculator will show you why. A rate difference persists for the whole term and compounds across every remaining payment; a fee is paid once. Run your two offers as separate inputs and compare the total interest line, then check whether the fee difference is larger than the interest difference. This page tells you the size of each effect; it does not tell you which offer to take.
Related calculatorsExtra payment calculator · Refinance break-even · How much house can I afford
Cluster us/mortgage · Unit us-mortgage-payment-calculator · Engine amortizing-loan / payment · Method: Standard amortizing-loan formula M = L × r / (1 − (1 + r)^−n) with interest accrued monthly on the outstanding balance; the payment is solved so the balance reaches exactly zero at the final period.