Mortgage Interest Calculator
Calculate your interest payments and view a complete amortization schedule
Interest Calculator
Monthly Payment
$1,896.2
Total Principal
$300,000
Total Interest
$382,633.47
Total Payment
$682,633.47
How Mortgage Interest Works
Mortgage interest is the cost of borrowing money to purchase a home. It's calculated based on the remaining principal balance of your loan. Each monthly payment consists of two parts:
Principal
The amount of money you borrowed. This is the portion of your payment that reduces your loan balance.
Interest
The cost of borrowing. This is calculated monthly based on the remaining principal balance.
The Amortization Formula
Monthly Payment = P × r × (1+r)ⁿ / ((1+r)ⁿ - 1)
Where: P = Principal, r = Monthly interest rate, n = Number of payments
Amortization Schedule Preview
| Month | Payment | Principal | Interest | Balance |
|---|---|---|---|---|
| 1 | $1,896.2 | $271.20 | $1,625 | $299,728.8 |
| 2 | $1,896.2 | $272.67 | $1,623.53 | $299,456.12 |
| 3 | $1,896.2 | $274.15 | $1,622.05 | $299,181.97 |
| 4 | $1,896.2 | $275.64 | $1,620.57 | $298,906.34 |
| 5 | $1,896.2 | $277.13 | $1,619.08 | $298,629.21 |
| 6 | $1,896.2 | $278.63 | $1,617.57 | $298,350.58 |
| 7 | $1,896.2 | $280.14 | $1,616.07 | $298,070.44 |
| 8 | $1,896.2 | $281.66 | $1,614.55 | $297,788.79 |
| 9 | $1,896.2 | $283.18 | $1,613.02 | $297,505.6 |
| 10 | $1,896.2 | $284.72 | $1,611.49 | $297,220.89 |
| 11 | $1,896.2 | $286.26 | $1,609.95 | $296,934.63 |
| 12 | $1,896.2 | $287.81 | $1,608.4 | $296,646.82 |
Showing first 12 months of 360 total payments
Interest vs. Principal Over Time
Year 1
Interest: ~$19,401.27
Principal: ~$3,353.18
Year 15
Interest: ~$14,444.51
Principal: ~$8,309.94
Year 30
Interest: ~$781.30
Principal: ~$21,973.15
Frequently Asked Questions
How is mortgage interest calculated?
Mortgage interest is calculated using the remaining principal balance multiplied by the monthly interest rate. Most mortgages use simple interest, calculated monthly. The formula is: Monthly Interest = Remaining Principal × (Annual Rate / 12).
What is an amortization schedule?
An amortization schedule is a table that shows each periodic loan payment, breaking down how much goes toward principal and how much goes toward interest. It also shows the remaining balance after each payment.
Why do I pay more interest at the beginning?
At the beginning of a mortgage, the principal balance is highest, so the interest portion of each payment is largest. Over time, as you pay down the principal, less interest accrues and more of your payment goes toward reducing the balance.
How much interest will I pay over the life of my loan in 2026?
As of 2026, the total interest depends on the loan amount, interest rate (currently averaging 6.5-7.5%), and loan term. For a $300,000 loan at 6.5% over 30 years, you would pay approximately $379,318 in interest.
Can I reduce the total interest I pay?
Yes! You can reduce total interest by making extra principal payments, refinancing to a lower rate, or choosing a shorter loan term. Even small extra payments can make a big difference over time.
What is the difference between simple and compound interest?
Most mortgages use simple interest, calculated only on the remaining principal. Compound interest would calculate interest on both principal and accumulated interest, which is rare in mortgages but common in other loans.
How does extra principal payment affect interest?
Extra principal payments reduce the outstanding balance faster, which reduces the amount of interest that accrues over time. A $100/month extra payment on a $300K loan at 6.5% can save ~$40,000 in interest over the life of the loan.
What is negative amortization?
Negative amortization occurs when monthly payments are insufficient to cover the interest due. The unpaid interest is added to the principal balance, increasing the total loan amount. This can happen with certain adjustable-rate mortgages.
How does refinancing affect interest payments?
Refinancing to a lower interest rate can significantly reduce total interest paid. Refinancing a $300K loan from 7.5% to 6% can save ~$100,000 in interest over 30 years, depending on closing costs.
Is mortgage interest tax deductible?
In 2026, mortgage interest may be tax deductible if you itemize deductions. The deduction limit is $750,000 for mortgages taken out after December 15, 2017. Consult a tax professional for details.
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Disclaimer: This calculator is for educational purposes only and does not constitute financial advice. Please consult with a qualified mortgage professional for personalized guidance.