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Monthly payment on a $200,000 mortgage at 7% for 30 years

A $200,000 loan at 7% over 30 years costs $1,330.60 a month. You pay $279,018 in interest, $479,018 in total.

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The numbers for these inputs

YearPrincipal paidInterest paidBalance left
1$2,032$13,936$197,968
2$2,178$13,789$195,790
3$2,336$13,631$193,454
4$2,505$13,462$190,949
5$2,686$13,281$188,263
6$2,880$13,087$185,383
7$3,088$12,879$182,295
8$3,312$12,656$178,983
9$3,551$12,416$175,432
10$3,808$12,160$171,625
11$4,083$11,884$167,542
12$4,378$11,589$163,164
13$4,695$11,273$158,469
14$5,034$10,933$153,436
15$5,398$10,569$148,038
16$5,788$10,179$142,250
17$6,206$9,761$136,043
18$6,655$9,312$129,388
19$7,136$8,831$122,252
20$7,652$8,315$114,600
21$8,205$7,762$106,395
22$8,798$7,169$97,597
23$9,434$6,533$88,162
24$10,116$5,851$78,046
25$10,848$5,120$67,198
26$11,632$4,335$55,566
27$12,473$3,495$43,094
28$13,374$2,593$29,719
29$14,341$1,626$15,378
30$15,378$589$0

How it works

A fixed-rate loan is repaid with the same payment every month. The payment is chosen so that, after the last one, the balance is exactly zero: payment = amount x r / (1 - (1 + r)^-n), where r is the monthly rate (yearly rate / 12) and n is the number of months.

Each month the interest is the balance times r. The rest of the payment reduces the balance. Early on most of the payment is interest; later most of it is principal, which the year-by-year table shows.

The result does not include fees, insurance, taxes or a variable rate. Your lender's figure can differ a little, so use this to compare options, then ask for the official schedule.

Common mistakes

  • Comparing loans by monthly payment alone: a longer term lowers the payment but raises the total interest.
  • Forgetting that the quoted rate and the APR can differ once fees are included.
  • Not checking whether extra payments go to principal; paying a little extra early saves the most interest.
  • Using the headline rate for a variable-rate loan, which can rise.

Questions

What is the monthly payment on $200,000 at 7%?

$1,330.60 a month for 360 months, assuming a fixed rate and equal payments.

How much interest will I pay in total?

$279,018, which is 139.51% of the amount borrowed. The total repaid is $479,018.

How do I pay less interest?

Choose a shorter term, make a larger down payment, or pay extra toward the principal. Change the term slider to see the trade-off between payment and total interest.

Does this include fees or insurance?

No. It covers principal and interest only. Add origination fees, insurance or property taxes separately; for a mortgage they can add a large share to the monthly cost.

Why is the first year mostly interest?

Interest is charged on the remaining balance, which is highest at the start. As the balance falls, a larger part of each equal payment goes to principal.

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