Plan your mortgage with confidence
See your monthly payment, total interest — and how extra payments shorten your loan.
How mortgage payments work
Most mortgages use fixed-rate amortization: you pay the same amount every month, but early payments are mostly interest while later ones are mostly principal.
- Monthly rate = annual rate ÷ 12
- Payments = years × 12
- Extra payments go straight to principal — cutting years off your loan
Example: $300,000 at 6% for 30 years → $1,799/month and about $347,500 in total interest.
FAQ
How is the monthly mortgage payment calculated?
With the standard amortization formula: M = P·r(1+r)^n / ((1+r)^n − 1), where P is the loan amount, r the monthly interest rate and n the number of payments.
How much interest will I pay in total?
It depends on rate and term. A $300,000 loan at 6% for 30 years costs about $347,500 in interest — more than the loan itself.
Do extra monthly payments really help?
Yes. An extra $200/month on that same loan cuts roughly 7 years off the term and saves over $70,000 in interest.
Is a 15-year or 30-year mortgage better?
A 15-year loan has far lower total interest but higher monthly payments. Choose based on what your monthly budget can safely handle.