How to Calculate a Home Loan Payment and Its Total Cost

From the price of a home to what the loan costs

A home purchase is usually paid for in two parts: a deposit from your own funds and a loan for the rest. This guide follows the arithmetic from price and deposit to the loan, the share of the price that is borrowed, the monthly payment and the total paid over the term, and says plainly what that payment leaves out.

Deposit, loan and loan-to-value

A home loan, or mortgage, pays the part of a property's price that your deposit does not. The deposit, also called a down payment, comes from your own funds. Loan-to-value is the loan divided by the property's value, here the price you enter. The loan is repaid by a level monthly payment of principal and interest on a reducing balance.

Markets use different words for the same things. A deposit in the UK, Australia and India is a down payment in the United States and Canada. A monthly payment is an EMI in India and a repayment elsewhere.

Compare deposits, rates and terms before you commit

Change one input at a time. A larger deposit lowers the loan, the payment, the interest and the loan-to-value together. A longer term lowers the payment and raises total interest. A higher rate raises both. The yearly chart shows how much of the loan is still owed at any point, which matters if you expect to sell or refinance before the term ends.

Price less deposit, then a level payment

Loan = price − deposit. Loan-to-value = loan ÷ price. The term in years is multiplied by 12 to give the number of monthly payments. The payment then follows the level-payment formula with the annual rate divided by 12, and the calculator reports the smallest payment in steps of 0.01 whose month-by-month ledger clears the loan. Total cost shown = deposit + all loan payments.

Loan = price − deposit; payment = loan × r ÷ (1 − (1 + r)^−n), with r = annual rate ÷ 12 ÷ 100 and n = years × 12

Reconcile a 400,000 purchase with an 80,000 deposit

Buy at 400,000 with a deposit of 80,000 and borrow at 6% a year for 30 years. The loan is 320,000, which is 80% of the price. The mathematical payment is 1,918.561680, so the payment is 1,918.57. In month 1 interest is 1,600.00 and 318.57 reduces the balance. After 10 years 267,792.93 is still owed. The 360th payment is 1,910.14. Total interest is 370,676.77, loan payments add up to 690,676.77, and deposit plus payments come to 770,676.77.

The yearly balances come from the same monthly ledger: 316,070.26 after 1 year, 297,773.34 after 5, 227,353.86 after 15 and 99,232.89 after 25. Half of the loan is not repaid until well after the halfway point of the term.

1. Enter a price of 400000, a deposit of 80000, an annual rate of 6 and a term of 30 years.
2. Read the loan of 320,000 at 80% loan-to-value, the payment of 1,918.57 and total interest of 370,676.77.
3. Open the chart's table to follow the balance, interest paid and principal repaid after each year.

Enter price, deposit, rate and years

Enter the price you are paying, the deposit from your own funds (0 if none), the annual rate on the reducing balance and the term as a whole number of years. Choose a market for number formatting only.

Read the payment, the ratio and the totals

The monthly figure is principal and interest only; the amount that leaves your account each month is usually higher once property taxes, insurance or service charges are added. Loan-to-value shows how much of the price is borrowed. Total interest is the cost of borrowing under these terms. The chart shows how slowly the balance falls in the early years of a long loan.

Deposit plus all loan payments is the cash paid to own the property outright under these terms, before taxes, insurance and fees. It is not a measure of profit or loss, which would depend on what the property is later worth.

One fixed rate for the whole term

A fixed nominal annual rate charged at one twelfth each month for the whole term, equal model months, payments at the end of each month starting one month after the loan is drawn, and no fees, taxes, insurance, prepayments, missed payments or rate changes. Interest is rounded half up to 0.01 each month.

What the figures leave out

Prices above 0 up to 1 trillion and deposits from 0 to below the price, each with at most 2 decimal places; annual rates from 0% to 100%; terms from 1 to 50 whole years. The calculator does not apply any country's deposit rules, loan-to-value limits or mortgage insurance, and does not estimate what a lender will offer.

Rate resets after a fixed period, floating rates, interest-only periods, offset accounts, overpayments and fees added to the loan are outside the model. Each can change the payment or the cost.

Principal and interest is not the whole housing cost

Do not read the monthly figure as the whole housing cost. Do not enter the loan amount as the price, or a percentage as the deposit: 20% of 400,000 is entered as 80000. Do not assume the rate stays fixed for the whole term if your loan has a shorter fixed period or a floating rate. Do not treat the entered price as the lender's valuation.

Deposit rules and insurance differ by country

In the United States, the CFPB explains that lenders use loan-to-value when pricing a loan and deciding whether to require mortgage insurance. In the United Kingdom, MoneyHelper notes that a larger deposit generally gives access to lower rates. In Australia, Moneysmart describes lenders mortgage insurance as a one-off cost that generally applies when you borrow more than 80% of the property's value and protects the lender, not you. In Canada, the federal consumer agency sets out minimum down payments that depend on the price and says mortgage loan insurance is required when the down payment is under 20%; fixed-rate mortgages there are also quoted with semi-annual compounding, which this calculator does not apply. In India, the RBI sets loan-to-value ceilings for housing loans that vary with the size of the loan. These rules change, so check the current position with the regulator or lender. The market selector changes number formatting only.

Home loan compared with a plain EMI calculation

The payment arithmetic is the same as for any level-payment loan. A home loan adds the step before it, from price and deposit to the loan and its loan-to-value, and the step after it, the cash paid in total including the deposit. Use the Loan EMI Calculator when you already know the amount borrowed and want the schedule month by month.

Educational scope

Educational arithmetic for a fixed-rate, level-payment home loan. It is not a mortgage offer, an eligibility or affordability assessment, an APR or comparison-rate disclosure, or financial advice. Deposit rules, insurance, taxes, fees and a lender's own rounding and conventions will differ; rely on the lender's documents.

Frequently asked questions

Sources and review

Sources reviewed Nov 14, 2026. Consult current local rules before relying on time-sensitive information.

• CFPB: loan-to-value ratio and your costs
• MoneyHelper: how much deposit you need for a mortgage
• Moneysmart: lenders mortgage insurance
• Government of Canada: how much you need for a down payment
• RBI: loan to value ratio for housing loans
• eCampusOntario: Canadian mortgages and semi-annual compounding