Calculate your monthly mortgage payment
Enter loan amount, interest rate, and term to estimate monthly payment, total amount paid, and total interest.
Why this calculator matters
Buying a home is often a household's largest single financial commitment. Looking only at the monthly payment is insufficient if you don't evaluate total borrowing costs and actual home equity built over time.
This analysis becomes significantly more valuable when connected to your net worth and available cash flow. Only then can you determine whether a mortgage builds or drains your wealth.
Mortgage payment formula (French amortization system)
The standard formula for fixed monthly mortgage payments is: Payment = P × [r(1+r)^n] / [(1+r)^n - 1], where P is principal borrowed, r is monthly interest rate (annual / 12), and n is total number of monthly payments.
In the early years, the vast majority of each payment goes toward interest. Over time, the ratio flips and payments amortize more principal. Understanding this is crucial when evaluating loan terms.
- P = loan principal borrowed.
- r = monthly interest rate in decimal form (3.5% annual = 0.035 / 12).
- n = total payment months (30 years = 360 months).
- Total Interest = (Monthly Payment × n) - P.
Key variables that dramatically alter results
Minor differences in interest rate or loan duration substantially alter your total outlay. A 1% rate increase on a €250,000 30-year mortgage adds over €50,000 in total interest paid.
Extending loan term from 25 to 30 years lowers monthly payment by €100-€150, but cumulative interest increases by over €30,000.
Early repayment: is it worth paying down debt?
Making early principal repayments reduces remaining debt and future interest charges. You can either reduce monthly payment (keeping term) or shorten term (keeping payment). Shortening term yields far greater interest savings.
However, prepaying debt isn't always optimal if your mortgage rate is low and expected investment returns are higher. The choice depends on your cash flow, liquidity buffer, and risk tolerance.
Practical examples: the true cost of a mortgage
€200,000 at 3% over 25 years. Monthly payment is €948, total paid is €284,400. You pay €84,400 in interest (42% above original principal).
Same €200,000 loan at 4.5%. Monthly payment rises to €1,111 and total paid jumps to €333,300. A 1.5% rate increase costs €48,900 extra.
€200,000 at 3% over 20 years. Monthly payment rises to €1,109, but total paid drops to €266,160. You save €18,240 in interest compared to 25 years.
Video breakdown: inside your mortgage amortization
In this video we break down how every monthly payment is divided between principal and interest over the lifetime of a mortgage, explaining why early years are proportionally the most expensive.
How to evaluate mortgage scenarios effectively
Look beyond whether a payment fits this month's budget. Evaluate how it impacts your residual cash flow, liquidity emergency fund, and net real estate equity pace.
A solid rule of thumb: mortgage payments should not exceed 30-35% of net monthly household income, and you should keep at least 6 months of expenses in liquidity before buying.
Apply This Knowledge to Your Real Finances
eXcenda combines net worth, expenses, simulations, and macro context into a single app so you can move from theory to action.
Frequently Asked Questions
It is an estimate based on a standard fixed-rate amortization schedule (French system). Real mortgage products may include closing fees, required insurance policies, or tax adjustments.
Shortening duration reduces total interest paid significantly over time. Lowering monthly payments frees up monthly cash flow. Choose based on whether total savings or monthly flexibility is your priority.
Fixed rate provides payment certainty for the entire loan term. Variable rate may start cheaper but exposes you to interest rate hikes. Decision depends on horizon, risk tolerance, and rate environment.
If your mortgage interest rate is lower than expected net investment returns (adjusted for taxes and risk), investing is mathematically superior. However, the psychological peace of being debt-free has real value.
Typically 20% of purchase price for down payment plus 10-12% for taxes, notary, and closing costs. Additionally, maintain a 6-month liquid emergency fund.