How to use it
- Choose US or UK mode. UK mode hides property tax, insurance, PMI and HOA, which are not part of a UK mortgage payment.
- Enter the home price, your down payment (deposit), the interest rate and the term in years.
- In US mode, add yearly property tax and home insurance, and the PMI rate if your down payment is under 20%.
- Optionally add an extra monthly payment to see how much interest you save and how much sooner the loan ends.
Worked example
A 400,000 home with a 20% down payment (80,000) leaves a 320,000 loan. At 6.5% over 30 years:
- Monthly rate: r = 6.5 ÷ 12 ÷ 100 ≈ 0.005417; number of payments: n = 360
- Principal and interest: 320,000 × 0.005417 ÷ (1 − 1.005417−360) ≈ 2,022.62
- Add property tax (4,800 ÷ 12 = 400) and insurance (1,500 ÷ 12 = 125): about 2,547.62 a month
- Total interest over 30 years: about 408,142
15 years vs 30 years
| 320,000 at 6.5% | Monthly P&I | Total interest |
|---|---|---|
| 30 years | 2,022.62 | 408,142 |
| 15 years | 2,787.54 | 181,758 |
| 30 years + 200 extra a month | 2,222.62 | about 302,714 (ends ~6.6 years early) |
UK mortgages: repayment vs interest-only
In the UK, council tax and buildings insurance are paid separately and PMI does not exist, so the monthly mortgage payment is just the loan repayment. For a £250,000 loan at 4.5% over 25 years:
- Repayment: about £1,389.58 a month; total interest about £166,874, and the loan is cleared at the end.
- Interest-only: £937.50 a month; total interest £281,250, and the full £250,000 is still owed at the end.
Most UK deals are fixed for 2 or 5 years and then move to the lender's standard variable rate, so this calculator's fixed-rate result is a planning estimate. Many lenders allow overpayments of up to 10% of the balance a year without a fee; check your own mortgage terms.
Ways to lower the cost
- A bigger down payment lowers the loan, the interest and, in the US, removes PMI at 20%.
- Small extra payments early in the loan cut years off the term, as the example above shows.
- Compare rates. Even 0.25% less makes a large difference over 25–30 years; try different rates above.
Frequently asked questions
What is PITI?
Principal, interest, taxes and insurance: the four parts of a typical US monthly mortgage payment when property tax and home insurance are paid through an escrow account.
When do I pay PMI?
US lenders usually require private mortgage insurance on a conventional loan when the down payment is under 20% of the price. This calculator stops PMI once the balance falls to 78% of the home price, the point where it is normally cancelled automatically under US rules.
How much do extra payments save?
On a 320,000 loan at 6.5% over 30 years, paying 200 extra each month saves about 105,000 in interest and ends the loan about 6 years and 7 months early.
Is a 15-year or 30-year mortgage better?
A 15-year loan has higher monthly payments but far less interest. For a 320,000 loan at 6.5%, the payment is about 2,788 a month over 15 years versus 2,023 over 30, but total interest is about 181,758 versus 408,142. Rates for 15-year loans are often lower too.
What is an interest-only mortgage?
With an interest-only mortgage (common in the UK for buy-to-let), you pay only the interest each month and the full loan is still owed at the end of the term. It is cheaper monthly but costs more interest overall and needs a plan to repay the balance.
Last updated · Built and checked by Moeed Hussain