Home Loan Calculator
Loan amount: $240,000.00
Monthly payment: $1,516.96
Total of all payments: $546,106.77
Total interest: $306,106.77
Estimates only, not a loan offer; taxes, insurance and fees are not included.
How to use this calculator
Start with the home price, which is the full purchase price of the property you are thinking about buying. Enter it in dollars, without commas or a dollar sign, and the calculator will use it as the starting point for every other figure on the page.
Next, enter your down payment. This is the amount you pay up front from your own funds, rather than borrowing. The calculator subtracts the down payment from the home price to work out the loan amount, which is the amount you actually borrow.
Then enter the annual interest rate as a percentage, for example 6.5, and the loan term in years, for example 30. The calculator updates live as you type, so there is no button to press. The loan amount is the amount borrowed. The monthly payment is what you would pay each month for principal and interest over the full term. The total of all payments is the monthly payment multiplied by the number of months. The total interest is the total of all payments minus the loan amount, which shows how much of your total spending goes to interest over the life of the loan.
Worked example
Take a home priced at $300,000 with a down payment of $60,000, which is 20% of the price. First, work out the loan amount by subtracting the down payment from the price: $300,000 minus $60,000 gives a loan of $240,000.
Now apply the formula with an annual interest rate of 6.5% and a term of 30 years. The monthly rate is 6.5 divided by 12 and then by 100, and the number of months is 30 times 12, which is 360. Putting the loan of $240,000 into the formula gives a monthly payment of $1,516.96.
Finally, multiply the monthly payment by 360 months to get the total of all payments, which is $546,106.77. Subtract the loan amount of $240,000 from that total to get the total interest of $306,106.77. In other words, over 30 years you would pay $240,000 of principal and $306,106.77 of interest in this example.
For comparison, a loan of $200,000 at 5% over 20 years gives a monthly payment of $1,319.91, total payments of $316,778.75 and total interest of $116,778.75. The shorter term and lower rate both reduce the total interest, even though the monthly payment is higher than it would be over a longer term.
How the monthly payment is worked out
Every monthly payment is made up of two parts: principal and interest. Principal is the amount you borrowed, and interest is the cost of borrowing it, charged on the balance that is still outstanding. The formula spreads the loan over the full term so that the monthly payment stays the same, while the split between principal and interest changes over time.
Early payments are mostly interest, because the outstanding balance is at its largest and interest is charged on that balance. As you pay the loan down, the balance falls, so less of each payment goes to interest and more goes to reducing the principal. By the final years of the loan, most of each payment is principal. This is why a longer term lowers the monthly payment but increases the total interest: you are borrowing for longer, and interest has more time to build up. This page explains the arithmetic only and is not financial advice, and it does not recommend any particular loan, rate or term.
Frequently asked questions
What is a down payment? A down payment is the part of the home price you pay up front, from your own funds, when you buy. The rest of the price is covered by the loan. In the worked example above, the down payment is $60,000, or 20% of a $300,000 home, leaving a loan of $240,000.
Does this include taxes and insurance? No. The payment shown here is principal and interest only. Property taxes, home insurance and any other fees are not included, so your full monthly housing cost could be higher than the figure shown.
What happens if the rate is 0? If the annual interest rate is 0, there is no interest to pay, so the monthly payment is simply the loan amount divided by the number of months. For example, a loan of $240,000 at 0% over 30 years, or 360 months, gives $666.67 per month.
Can I compare two terms? Yes. Enter one term, note the monthly payment and the totals, then change only the term and compare the new totals. A shorter term usually means a higher monthly payment but less total interest, while a longer term usually means a lower monthly payment but more total interest.
Is this a loan offer? No. This calculator gives an estimate only, based on the numbers you enter. A lender’s actual terms vary with your circumstances, the property and the market, so treat the results as a planning guide, not as an offer or a promise of a loan.
Estimates only, not a loan offer; taxes, insurance and fees are not included.