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Finance Calc Kit
Mortgages

Mortgage Interest Calculator

Calculate total cumulative mortgage interest paid over the life of your loan, monthly interest breakdown, and potential interest tax deductions.

Mortgage details

$
%
years
%

Tax savings are a simplified estimate assuming you itemize and deduct mortgage interest. Consult a tax professional for your situation.

Total lifetime interest

$446,405.71

Total loan cost: $796,405.71

Monthly payment

$2,212.24

Interest-to-loan ratio

127.5%

Year 1 interest paid

$22,634.82

Estimated tax savings

$107,137.37

At 24.0% marginal rate

Principal vs total interest

Total paid$796,405.71
  • Principal$350,000.0043.9%
  • Total interest$446,405.7156.1%

How mortgage interest is calculated

Fixed-rate mortgages front-load interest in early years because each payment is split between interest on the remaining balance and principal reduction.

  1. Calculate the monthly payment

    M=P×r(1+r)n(1+r)n−1M = P \times \frac{r(1+r)^n}{(1+r)^n - 1}

    A $350,000.00 loan at 6.5% over 30 years requires a monthly payment of $2,212.24.

  2. Derive total interest over the loan term

    Itotal=(M×n)−PI_{\text{total}} = (M \times n) - P

    Over 360 payments, you would pay $796,405.71 in total, of which $446,405.71 is interest.

  3. Measure first-year interest and tax impact

    Tax Savings≈Itotal×Tax Rate\text{Tax Savings} \approx I_{\text{total}} \times \text{Tax Rate}

    Interest in year one totals about $22,634.82. At a 24.0% marginal tax bracket, estimated lifetime interest deductions could reduce taxes by about $107,137.37.

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Understanding total mortgage interest

On a typical fixed-rate mortgage, interest is front-loaded: early payments send more money to interest and less to principal because interest is calculated on the remaining balance each month. Over a 30-year term, total interest can exceed the original loan amount.

This calculator shows your monthly payment, total interest over the full term, first-year interest, and a simplified estimate of potential tax savings from the mortgage interest deduction. To see principal and interest alongside property taxes and insurance, use the mortgage calculator with taxes and insurance. To compare two loan offers, try the mortgage comparison calculator. For a full payment schedule, use the amortization calculator.

How total interest is calculated

First, the tool computes the fixed monthly payment using the standard amortization formula:

Total interest is the difference between everything you pay over the life of the loan and the original principal borrowed:

The interest-to-loan ratio expresses total interest as a percentage of the principal, which helps you see how expensive the financing is relative to the amount borrowed.

First-year interest and tax deductions

The calculator sums interest from the first 12 months of the amortization schedule. In year one, the outstanding balance is highest, so interest charges are also highest. If you itemize deductions, mortgage interest may reduce your federal income tax. The estimated tax savings multiply total interest by your marginal tax bracket. Actual savings depend on whether you itemize, the standard deduction, and current tax law.

Worked example

A $350,000 mortgage at 6.5% over 30 years produces a monthly payment of about $2,212.24. Over 360 payments you would pay about $796,405.71 in total, of which about $446,405.71 is interest. That is roughly 127.5% of the original loan amount. Interest in the first year totals about $22,634.82. At a 24% marginal tax bracket, estimated lifetime tax savings from the interest deduction would be about $107,137.37, though actual benefit depends on your full tax picture.

Ways to reduce total interest

  • Choose a shorter loan term when the higher payment fits your budget.
  • Make extra principal payments with the mortgage acceleration calculator.
  • Shop multiple lenders to secure a lower rate.
  • Put more money down to reduce the financed amount.

Frequently asked questions

Why is so much interest paid in the early years?
Each month, interest is calculated on the remaining balance. When the balance is high, the interest portion of your payment is also high. As principal is paid down, more of each payment goes toward principal and less toward interest.
What is the interest-to-loan ratio?
It is total interest divided by the original loan amount, expressed as a percentage. A ratio of 127% means you pay $1.27 in interest for every $1 borrowed over the full term.
Can I deduct all mortgage interest on my taxes?
Not always. You must itemize deductions to benefit from mortgage interest, and the standard deduction may be more valuable. Loan limits and current tax law also apply. This tool provides a simplified estimate only.
Does refinancing change total interest?
Yes. Refinancing resets the amortization schedule. A lower rate or shorter term can reduce total interest, but closing costs and how long you keep the new loan matter.
How does a 15-year loan compare to a 30-year loan?
A 15-year loan has higher monthly payments but far less total interest because the balance is paid down faster. Use the mortgage comparison calculator to model both side by side.
Are my inputs stored on a server?
No. All calculations run in your browser. Changing inputs updates the page URL so you can bookmark or share a scenario.

Resources and references

The formulas and methods in this calculator were checked against these independent sources.