Mortgage Interest Calculator
Print| Monthly Principal & Interest | $0.00 / mo |
The Mortgage Interest Calculator enables home buyers, homeowners, and real estate investors to calculate monthly interest charges, total lifetime mortgage interest paid, and interest savings from extra principal payments across 15-year, 20-year, and 30-year fixed-rate home loans.
The Mortgage Interest Formula
Monthly mortgage interest is computed on the current outstanding principal balance using the monthly interest rate factor:
Monthly Interest Charge = Remaining Principal Balance × ( Annual APR / 12 )
Monthly Principal Reduction = Total Monthly Payment (P&I) - Monthly Interest Charge
Total Lifetime Mortgage Interest = ( Monthly Payment × Total Months ) - Initial Loan Principal
Total Interest Comparison: 15-Year vs. 30-Year Mortgage
Compare total lifetime interest paid on a $350,000 home loan across standard interest rate levels:
| Interest APR | 15-Year Monthly Payment | 15-Year Total Interest | 30-Year Monthly Payment | 30-Year Total Interest |
|---|---|---|---|---|
| 5.50% APR | $2,859.78 | $164,760.40 | $1,987.26 | $365,413.60 |
| 6.25% APR | $2,999.36 | $189,884.80 | $2,154.91 | $425,767.60 |
| 7.00% APR | $3,145.87 | $216,256.60 | $2,328.56 | $488,281.60 |
| 7.75% APR | $3,299.07 | $243,832.60 | $2,507.82 | $552,815.20 |
Step-by-Step Mortgage Interest Calculation Example
Here is an example calculating Year 1 interest paid on a $400,000 mortgage at 6.50% APR (30-year term):
- Calculate Monthly Principal & Interest Payment: $400,000 at 6.50% for 360 months = $2,528.27 per month.
- Calculate Month 1 Interest Charge:
$400,000 × (0.065 / 12) = $2,166.67 interest(Principal paid = $361.60). - Calculate Month 2 Interest Charge: New balance = $399,638.40.
$399,638.40 × (0.065 / 12) = $2,164.71 interest. - Sum Year 1 Interest (12 Months): Total interest paid in Year 1 equals $25,720.14.
- Determine Total Lifetime Interest:
($2,528.27 × 360) - $400,000 = $510,177.20 total interest.
Frequently Asked Questions
Is mortgage interest tax-deductible?
Under current US federal tax law, homeowners who itemize deductions can deduct mortgage interest paid on loan amounts up to $750,000 ($375,000 if married filing separately) for primary and secondary residences.
Why is mortgage interest highest at the beginning of the loan?
Mortgage interest is calculated on your remaining unpaid principal balance. Because your balance is highest at the beginning, interest charges consume the vast majority of early monthly payments.
How does refinancing lower overall mortgage interest?
Refinancing lowers interest expenses by securing a lower APR rate, shortening the loan term (e.g., refinancing from a 30-year into a 15-year mortgage), or both.
How much total interest do you pay on a 30-year mortgage?
At current interest rates (6% to 7%), total lifetime interest paid on a 30-year mortgage typically exceeds 125% to 140% of the original loan principal amount.