David Chen is a Certified Financial Analyst with over 10 years of experience in finance and mortgage management, offering expert advice on mortgage calculations.
Enter the necessary values to calculate your mortgage payment and principal payments for different loan terms. This tool helps you understand how different factors affect your mortgage cost.
Mortgage Calculator: Interest and Principal Only
Mortgage Calculator Formula
Monthly Payment = Loan Amount × (Monthly Interest Rate / (1 – (1 + Monthly Interest Rate) ^ -Total Payments))
Formula Source: Investopedia
- Loan Amount: The total loan amount.
- Annual Interest Rate: The yearly interest rate.
- Loan Term: The loan duration in years.
Related Calculators
What is Mortgage Interest and Principal?
Mortgage interest refers to the amount you pay to the lender as a percentage of the loan balance. Principal is the original amount you borrowed. A mortgage typically involves paying both interest and principal over the life of the loan, which impacts your monthly payments and total cost of the loan.
How to Calculate Mortgage Payments (Example)
- Step 1: Enter the loan amount, annual interest rate, and loan term.
- Step 2: Click “Calculate” to determine your monthly payment.
- Step 3: The result will show your monthly mortgage payment.
Frequently Asked Questions (FAQ)
How do I lower my monthly mortgage payment? You can lower your payment by refinancing, extending your loan term, or paying a larger down payment.
What is the difference between principal and interest? Principal is the original loan amount, while interest is the cost of borrowing the money, paid to the lender.
Can I pay off my mortgage early? Yes, many lenders allow you to make additional payments toward the principal without penalty.