Mortgage Interest Calculator

Formula

Total Interest = (PMT × n) - P

Enter Values

Loan Amount ($) *

Mortgage loan amount. Larger loans = more interest paid over time.

Annual Interest Rate (%) *

Annual interest rate. Even 0.5% difference can mean tens of thousands in total interest. Compare lender offers carefully.

Loan Term (years) *

Loan term. Longer terms = lower monthly payment but MUCH more total interest. A 30-year loan can cost 2x the interest of a 15-year loan at the same rate.

Results

Interpretation

Monthly Payment: $2,328.55 | Total Paid: $838,277.80 | Total Interest: $488,277.80 | Total Principal: $350,000.00 | Interest is 58.2% of total paid | Average Interest/Year: $16,275.93 | Average Interest/Month: $1,356.33. You'll pay nearly $500K in interest alone - that's 139% of the original loan amount!

How It Works

Total interest paid equals the sum of all payments minus the original loan amount: Total Interest = (PMT × n) - P. This represents the cost of borrowing money over time. Interest can exceed the principal for long-term loans at higher rates. Useful for comparing loan offers and deciding between different terms.

Key Points

Compare 15-year vs 30-year mortgages - longer term = much more interest.
Even 0.25% rate difference can save thousands over loan life.
Mortgage interest is tax-deductible in US (up to limits) - consult tax advisor.
Consider total cost, not just monthly payment, when choosing loan terms.
Refinancing can save interest if rate drops significantly (2%+ usually worth it).

References

Broverman, S.A. (2015). Mathematics of Investment and Credit (6th Edition). ACTEX Publications. Chapter 3, Section 3.1.2 (pages 82-85). Total interest formula: I_total = R×n - L where R is payment, n is number of payments, L is loan amount. Section 3.2: Mortgage comparisons (pages 94-99).