How this mortgage calculator works
The monthly payment is calculated with the standard amortization formula: the loan amount multiplied by the monthly interest rate, adjusted so the loan is fully paid off over the term. The tool converts your annual rate to a monthly rate and your term to months, then shows the monthly principal + interest payment, the total interest over the life of the loan and the total amount you will actually pay.
A 30-year mortgage has much lower monthly payments than a 15-year loan, but the total interest is often two to three times larger. Comparing the two side by side is one of the fastest ways to decide how aggressively you want to pay off a mortgage.
Ways to pay less interest
- Make one extra payment per year — an easy way to cut years off a loan.
- Round monthly payments up; the extra goes straight to principal.
- Refinance when rates drop enough to cover closing costs.
- A 15-year term usually saves more interest than it costs in cash flow — if you can afford it.