How to Work Out Your Mortgage Payment Before You Buy
A mortgage payment is not just the price divided by the years. Interest changes the picture, and this guide explains how to check the real monthly figure first.
What is the Mortgage Calculator?
Enter the home price, your down payment, the annual interest rate and the loan term. The calculator subtracts the down payment from the price to get the loan amount, then spreads it over equal monthly payments using the standard amortising loan formula, where interest is charged each month on the remaining balance.
How to use it
- Enter the home price and the down payment you plan to make.
- Enter the annual interest rate and the loan term in years.
- Press Calculate to see the monthly payment, total paid and total interest.
Worked example
Home price 200000, down payment 40000, rate 5%, term 25 years: loan amount 160000, monthly payment about 935.34, total of payments about 280603.22, total interest about 120603.22.
How much will I pay each month on a mortgage?
It depends on four things: the loan amount after your down payment, the annual interest rate, and the length of the loan. A longer term lowers the monthly payment but raises the total interest, while a higher rate raises both. Enter your own numbers in the calculator to compare terms side by side before you commit.
Frequently asked questions
Does a bigger down payment lower the monthly payment?
Yes. A bigger down payment means a smaller loan, and a smaller loan means a lower monthly payment and less total interest.
What happens if the interest rate is zero?
With no interest, the loan is simply divided equally over all the months, so the monthly payment is the loan amount divided by the number of months.