How the calculation works
The loan is the home price minus your down payment. Each month, interest is charged on the balance you still owe, at one twelfth of the yearly rate. How fast the balance falls depends on the repayment type.
- Level payment (annuity): the same payment every month. At first it is mostly interest; over time more of it repays the loan.
- Linear: the same amount of principal every month, plus interest on the remaining balance. The payment starts higher and falls every month.
- Interest-only: you pay only the interest. The full loan is still owed at the end of the term.
Level payment = L × i / (1 − (1 + i)−n)
Linear payment in month k = L / n + (L − (k − 1) × L / n) × i
Interest-only payment = L × i
L = loan amount · i = yearly rate / 12 · n = number of months.Worked example
A home costs 400,000. You put down 20% (80,000), so the loan is 320,000. The rate is 6.5% for 30 years (n = 360, i = 0.065 / 12 = 0.0054167).
- Level payment: 320,000 × 0.0054167 / (1 − 0.14302) = 2,022.62 a month. Total interest over 30 years: 408,142.
- Linear: principal is 320,000 / 360 = 888.89 a month. The first payment is 888.89 + 1,733.33 interest = 2,622.22; the last is 893.70. Total interest: 312,867.
- Interest-only: 320,000 × 0.0054167 = 1,733.33 a month, and 320,000 is still owed after 30 years. Total interest: 624,000.
What this calculator does not include
- Property tax, home insurance, mortgage insurance and service charges.
- Tax relief on mortgage interest and purchase costs such as transfer tax, notary or closing fees.
- Rates that change after a fixed-rate period. The rate is assumed to stay the same for the whole term.
- Whether a lender will approve the loan. That depends on your income, other debts and local rules.
Amounts are rounded for display only; the calculation itself is not rounded. Results are estimates for information, not financial advice. Last updated: 12 November 2026.
Frequently asked questions
What is the difference between the three repayment types?
With an annuity (level payment) mortgage you pay the same amount every month. With a linear mortgage you repay the same amount of principal every month, so the payment starts higher and falls. With an interest-only mortgage you pay only interest and still owe the full loan at the end.
Which repayment type costs the least interest?
For the same loan, rate and term, a linear mortgage costs the least interest because the balance falls fastest. Interest-only costs the most, because the balance never falls.
What is loan-to-value?
Loan-to-value (LTV) is the loan divided by the price of the home. A larger down payment gives a lower LTV. Lenders often offer better rates at a lower LTV.
Does the payment include property tax and insurance?
No. This calculator shows principal and interest only. Property tax, home insurance, mortgage insurance and service charges come on top and differ by country and by home.
Does this include tax relief on mortgage interest?
No. Tax rules differ by country and by person. The result is the gross payment before any tax relief.