# Mortgage Interest Calculator

URL: https://speedycalculator.com/calculators/finance/mortgage-interest/
Last updated: 2026-10-25

> The mortgage interest calculator works out how much interest you pay on your mortgage in any given year, the interest paid so far and over the full loan – useful for estimating the mortgage interest tax deduction.

## Inputs

- Loan amount
- Interest rate (%)
- Loan term (years)
- Year of the loan
- Marginal tax rate (%)

## Results

- Monthly payment
- Balance at the start of the year
- Balance at the end of the year
- Interest paid in that year
- Interest paid up to the end of that year
- Total interest over the loan
- Potential tax saving that year (if itemizing)

## Formula

```
Interest in year y = payments in year y − (balance at start of year − balance at end of year)
Cumulative interest = payment × months − principal repaid
Tax saving ≈ interest × marginal rate (if you itemize)
```

## Explanation

Most of a mortgage payment early on is interest. In the U.S. you can deduct interest on up to $750,000 of mortgage debt if you itemize, but the higher standard deduction means many homeowners no longer benefit.

### How to use the Mortgage Interest Calculator

- **Loan amount**
- **Interest rate**
- **Loan term**
- **Year of the loan**
- **Marginal tax rate**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter the loan amount, interest rate, term, the year to look at and your marginal tax rate.

### Tips

- Compare loans by APR and total cost, not just the monthly payment.
- Extra payments go straight to principal and can save a lot of interest.
- Pay off the highest-rate debt first if you want to save the most money.
- Check for prepayment penalties before paying a loan off early.

### Common mistakes to avoid

- Stretching a loan term to lower the payment without seeing the extra interest.
- Paying only the minimum on credit cards.
- Forgetting fees that are rolled into the loan.

### Inputs explained

FieldWhat to enterLoan amountAmount in your currencyInterest rateIn %Loan termIn yearsYear of the loanA numberMarginal tax rateIn %

### What each result means

- **Monthly payment** = pmt([Interest rate]÷1200, [Loan term]×12, [Loan amount])
- **Balance at the start of the year** = max(bal([Loan amount], [Interest rate]÷1200, [Loan term]×12, (min([Year of the loan], [Loan term]) - 1)×12), 0)
- **Balance at the end of the year** = max(bal([Loan amount], [Interest rate]÷1200, [Loan term]×12, min([Year of the loan], [Loan term])×12), 0)
- **Interest paid in that year** = [Monthly payment]×12 - ([Balance at the start of the year] - [Balance at the end of the year])
- **Interest paid up to the end of that year** = [Monthly payment]×min([Year of the loan], [Loan term])×12 - ([Loan amount] - [Balance at the end of the year])
- **Total interest over the loan** = [Monthly payment]×[Loan term]×12 - [Loan amount]
- **Potential tax saving that year (if itemizing)** = [Interest paid in that year]×min(1, 750000÷[Loan amount])×[Marginal tax rate]÷100

### Example values

How the main result changes when **Loan amount** changes and everything else stays at the example values above:

Loan amountInterest paid in that year175,00011,317.41262,50016,976.11350,00022,634.82437,50028,293.52525,00033,952.23700,00045,269.64

## Worked example

Inputs — Loan amount: $350,000; Interest rate: 6.5 %; Loan term: 30 years; Year of the loan: 1; Marginal tax rate: 22 %.

Results — Monthly payment = $2,212.24; Balance at the start of the year = $350,000.00; Balance at the end of the year = $346,087.96; **Interest paid in that year = $22,634.82**; Interest paid up to the end of that year = $22,634.82; Total interest over the loan = $446,405.71; Potential tax saving that year (if itemizing) = $4,979.66.

## FAQ

**How much mortgage interest will I pay this year?**
Payments in the year minus principal repaid – shown above.

**Is mortgage interest tax-deductible?**
Yes, on up to $750,000 of acquisition debt if you itemize.

**When does the interest share fall?**
Each year – the principal share grows as the balance shrinks.

**What formula does the Mortgage Interest Calculator use?**
Interest in year y = payments in year y − (balance at start of year − balance at end of year).


## Sources

- [IRS – Publication 936, Home mortgage interest deduction](https://www.irs.gov/publications/p936)