Home Loan Calculator

Most buyers fixate on the interest rate. The down payment usually moves the monthly payment more, because it sets both the principal and the loan-to-value ratio the lender prices against.

Two identical houses, two down payments

Take a 400,000 property at 6.5% over 30 years.

Putting an extra 40,000 down cuts the payment by 252.83 every month and saves 51,017.80 of interest over the term. It also brings the LTV down to 80%. Above that threshold many lenders require mortgage insurance and price the rate a notch higher, which is why this calculator shows LTV as one of its result rows.

What the loan-to-value figure tells you

LTV is the amount borrowed divided by the property value. At 90% you own a tenth of the house on paper. That's thin enough that a modest fall in local prices can leave you in negative equity and unable to remortgage. At 80% you've got a buffer, and you're usually on the better side of the lender's pricing grid.

The tool works out LTV from the value you enter, not from a surveyor's valuation. If the lender's valuer comes in below the agreed price, your real LTV will be worse than the figure shown here.

The payment schedule behind the monthly number

Under the result there's a year-by-year amortisation table. You can expand it into individual months and export it as a PDF. On the 320,000 loan, month one splits 1,733.33 to interest and 289.28 to principal, and principal doesn't overtake interest until month 233, nineteen and a half years in. For most of its life, a thirty-year mortgage is mainly paying interest.

What this number leaves out

The monthly figure here is principal and interest only. What actually leaves your account each month will be noticeably larger:

• Property tax, buildings insurance and any mortgage insurance are excluded. Where a lender escrows these, they come out in the same monthly debit and can add another quarter to the payment.
• Stamp duty, registration, legal fees and survey costs are one-off charges outside the loan entirely.
• Service charges, ground rent and maintenance on the property aren't financing costs, so they aren't modelled.
• The rate is held flat for the whole term. A tracker or a two-year fix won't behave this way.

Use the output as a screening figure to compare offers and test how much house you can carry. Once you have a decision in principle, the lender's illustration is the binding document, and it'll include the fees this page leaves out.

Other pages worth opening

For a generic reducing-balance loan without the property-specific fields, use the EMI calculator. To see what the deposit you're saving might grow to first, try the SIP calculator. And to check what the same monthly figure will feel like in fifteen years, run it through the inflation calculator.