Mortgage Repayment Calculator

The Amortization Formula

The core calculation is the standard fixed-rate mortgage formula: M = P x [r(1+r)^n] / [(1+r)^n - 1], where P is the loan principal, r is the monthly interest rate (annual rate / 12), and n is the total number of monthly payments (years x 12).

Worked Example

A $200,000 loan at 6% annual interest over 15 years: monthly rate r = 0.06 / 12 = 0.005, and n = 180 payments. Computing (1.005)^180 to approximately 2.4541, the formula gives M = 200,000 x [0.005 x 2.4541] / [2.4541 - 1] = 200,000 x 0.012270 / 1.4541, or approximately $1,687.71 per month in principal and interest alone. Over 180 payments, total payments come to roughly $303,787.80, of which about $103,787.80 is interest - more than half the principal, which is typical for a 15-year loan at this rate.

Why Extra Payments Save More Than They Cost

Every dollar of extra monthly payment reduces the principal balance immediately, which means less of every future payment goes to interest. The tool recalculates the full amortization schedule with extra payments applied and compares total interest paid against the no-extra-payment baseline to report the savings and the number of months shaved off the loan term.

What's Excluded from Principal and Interest

Property tax, homeowners insurance, and HOA fees are added on top of the principal-and-interest figure as flat monthly amounts (annual tax and insurance divided by 12) - they don't affect the amortization math or the interest calculation, since they're not part of the loan itself.

Assumptions

The calculator assumes a fixed interest rate for the full term and a fixed extra payment amount every month. It does not model rate resets, PMI removal thresholds, or lump-sum principal payments made outside the regular monthly schedule.