Overview
A mortgage calculator helps you estimate your monthly mortgage payment based on the loan amount, interest rate, and loan term. Understanding your mortgage payments is essential for budgeting and financial planning.
This calculator uses the standard amortization formula with monthly compounding, the same method used by banks and financial institutions worldwide.
Formula
The monthly mortgage payment is calculated using the standard amortization formula:
M = P · r · (1 + r)n ⁄ ((1 + r)n − 1)
Where:
- M = monthly payment
- P = principal loan amount
- r = monthly interest rate (annual rate divided by 12)
- n = total number of payments (loan term in years multiplied by 12)
Variables
| Variable | Description | Default Value |
|---|---|---|
| Loan Amount | Total amount you plan to borrow | €250,000 |
| Interest Rate | Annual interest rate as a percentage | 3.8% |
| Loan Term | Duration of the loan in years | 30 years |
Examples
Example 1: Standard 30-Year Mortgage
- Loan Amount: €250,000
- Interest Rate: 3.8%
- Loan Term: 30 years
- Monthly Payment: €1,164.89
- Total Interest: €169,362
Example 2: Shorter 15-Year Term
- Loan Amount: €250,000
- Interest Rate: 3.8%
- Loan Term: 15 years
- Monthly Payment: €1,824.26
- Total Interest: €78,367
Example 3: Larger Loan
- Loan Amount: €500,000
- Interest Rate: 4.2%
- Loan Term: 30 years
- Monthly Payment: €2,445.09
- Total Interest: €380,231
Methodology
This calculator uses standard amortization with monthly compounding. The formula assumes:
- Fixed interest rate for the entire loan term
- Monthly payments (12 per year)
- No additional payments or prepayments
- No taxes, insurance, or fees included
The amortization schedule shows how each payment is split between principal and interest over time. In the early years, a larger portion of each payment goes toward interest. As the loan progresses, more of each payment reduces the principal balance.
FAQ
What is a mortgage calculator?
A mortgage calculator estimates your monthly payment based on the loan amount, interest rate, and term. It helps you understand the total cost of borrowing and plan your budget.
How accurate is this calculator?
This calculator provides estimates for planning purposes. Actual payments may vary based on fees, property taxes, homeowners insurance, PMI, and other costs not included in this calculation.
What is amortization?
Amortization is the process of paying off a loan through regular payments over time. Each payment covers both interest and principal, with the proportion shifting toward principal as the loan matures.
Can I calculate different loan terms?
Yes. Adjust the “Loan Term” slider to compare payments for 15, 20, or 30-year mortgages. Shorter terms have higher monthly payments but lower total interest.
Does this include taxes and insurance?
No. This calculator shows principal and interest only. Your actual monthly payment (PITI) may also include property taxes, homeowners insurance, and private mortgage insurance (PMI).
What is the interest share?
The interest share shows what percentage of your total payments goes toward interest rather than principal. A lower interest share means you are paying less in total interest relative to your loan amount.