Mortgage Calculator
For Information Only
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Your mortgage is likely the largest financial commitment you'll make. This calculator gives you a solid estimate of your monthly payments, but it's important to understand the components.
Principal and Interest
Every monthly payment is split between two parts: the principal (the original loan amount) and the interest (the cost of borrowing). Early in your loan, a larger portion of your payment goes toward interest. Over time, this shifts, and more goes toward paying down your principal.
Loan Term
This is the length of time you have to repay the loan. A shorter term (like 15 years) means higher monthly payments but less total interest paid. A longer term (like 30 years) results in lower monthly payments but significantly more interest over the life of the loan.
Fixed vs. Variable Rates
This calculator assumes a fixed interest rate, meaning the rate stays the same for the entire loan term. Variable-rate mortgages exist where the rate can change, which could increase or decrease your payments.
Logic & Formulas
The monthly payment for a repayment mortgage is calculated using the standard loan amortization formula. The calculator first determines the total loan amount by subtracting the deposit from the property value.
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
Where:
M= Monthly PaymentP= Principal Loan Amount (Property Value - Deposit)i= Monthly Interest Rate (Annual Rate / 100 / 12)n= Number of Payments (Loan Term in Years * 12)
For "Interest Only" mortgages, the calculation is simpler: Monthly Payment = P * i. In this case, the total repayable includes the original principal, as it is not paid down over the term.