Mortgage Repayment Calculator

How a repayment mortgage works

Each monthly repayment blends interest on the outstanding balance with a slice of capital. Early on, interest dominates: on a $300,000 loan at 5.5% over 30 years, the repayment is about $1,703 a month, but the first payment is $1,375 interest and only $328 capital. As the balance falls, the split flips — by the final years almost everything is capital. Total interest over the full term: about $313,000. The full month-by-month pattern is in our amortization calculator.

Repayment vs interest-only: the honest comparison

An interest-only loan on the same $300,000 at 5.5% costs $1,375 a month — $328 less — but after any interest-only period the balance is still $300,000, and the remaining term must repay it all. Run 5 years interest-only, then repay over 25 years, and the repayment jumps to about $1,842 a month while total interest rises to roughly $335,000. Interest-only can suit investors with a genuine exit plan; for a home you intend to keep, repayment is almost always the safer structure. Full analysis in the interest-only calculator.

What else is in the monthly repayment?

US lenders collect property taxes and homeowners insurance monthly into escrow, so your total outgo is higher than the capital-and-interest figure — this calculator includes both from the start, plus PMI when the deposit is under 20%. In the UK the equivalent add-ons are council tax and buildings insurance; UK buyers can use our UK mortgage calculator in pounds.

Shortening the repayment term

The fastest way to cut total interest is a shorter term: the same $300,000 at 5.5% over 15 years repays at about $2,451 a month but costs only about $141,000 in interest — roughly $172,000 less than the 30-year path. Compare structures with the 15 vs 30 year calculator, or keep the long term and overpay voluntarily with the extra payments calculator.