About

An Annuity Mortgage is the most common type of home loan, where you pay a fixed amount every month for the duration of the term. This monthly payment covers both the interest on the loan and the repayment of the principal amount.

This calculator helps you determine exactly how much that monthly payment will be based on your loan amount, interest rate, and term length. It helps borrowers understand the long-term cost of financing a property.

Formulas

The calculator uses the standard fixed-rate annuity formula to determine the monthly payment ($M$).

M = P ×

r(1 + r)ⁿ(1 + r)ⁿ - 1

Where:
• $P$ = Principal Loan Amount
• $r$ = Monthly Interest Rate (Annual Rate / 12)
• $n$ = Total Number of Payments (Years × 12)

Reference Data

Year	Interest Portion	Principal Portion	Balance Trend
Year 1	High (approx 70-80% of payment)	Low	Slow decrease
Year 15	Medium	Medium	Steady decrease
Year 30	Very Low	High	Rapid finish

Frequently Asked Questions

No. This calculation only covers Principal and Interest (P&I). Property taxes, homeowners insurance, and HOA fees are usually extra costs added to your monthly bill by the lender.

Making extra payments reduces the Principal ($P$) faster. Since interest is calculated on the remaining principal, this significantly reduces the total interest paid and shortens the loan term.