How much interest will I pay on my mortgage in total?
On a long-term mortgage the total interest often approaches or exceeds the amount borrowed. At 6 percent over 30 years, total interest comes to roughly 116 percent of the loan — meaning the house costs more than twice its price. Rate and term are what drive this: the same loan over 15 years instead of 30 cuts total interest by well over half, because the balance falls much faster and there are fewer months for interest to accrue.
Why is nearly all of my early payment going to interest?
Interest is charged on the outstanding balance, which is at its largest at the start. Your payment is a fixed amount, so whatever is left after covering that month's interest goes to principal — early on, very little. As the balance falls, the interest portion shrinks and the principal portion grows, which is why the split shifts steadily over the life of the loan. This calculator marks the crossover month where principal finally overtakes interest.
What is the crossover point on a mortgage?
It is the first month where more of your payment reduces the balance than pays interest. On a 30-year loan at 6 percent it does not arrive until around month 223 — year 19 of 30. Lower rates bring it forward, higher rates push it back, but it is almost always far later than people expect. It is a useful figure because it shows how long you spend mostly renting money from the bank, and why early overpayments have such an outsized effect compared with later ones.
How does the interest rate change the total cost?
Sharply, and not proportionally. Because interest compounds over hundreds of payments, a one-point difference in rate changes total interest far more than one percent. On a 300,000 loan over 30 years, moving from 6 to 7 percent adds roughly 70,000 in total interest. This is why shopping rates, improving your credit score, or buying discount points can be worth substantial effort.
Is mortgage interest tax deductible?
It depends entirely on your country and circumstances. In the United States, mortgage interest on a primary residence may be deductible if you itemise, subject to loan-size limits. Many other countries offer no deduction on an owner-occupied home, though interest on a rental property is often deductible as a business expense. This calculator shows interest before any tax treatment — check your local rules or ask an accountant.
Does paying biweekly instead of monthly reduce interest?
Yes, though not for the reason usually given. Paying half your monthly amount every two weeks produces 26 half-payments a year, which is 13 monthly payments rather than 12 — you are simply making one extra payment annually. That typically shortens a 30-year mortgage by several years. The same result comes from paying one-twelfth extra each month, so choose whichever fits your pay cycle.