Mortgage calculator - monthly payment

Example: a 180,000 EUR flat with a 10% down payment

The property costs 180,000 EUR and the down payment is 10%, or 18,000 EUR, so the loan is 162,000 EUR. The rate is 4.2% a year and the term 30 years, or 360 months. The calculator gives a monthly payment of 792.21 EUR.

Interest for the first month is 162,000 × 0.042 ÷ 12 = 567 EUR. Only 225.21 EUR of the payment goes to principal. Over the first year you pay about 6,751 EUR of interest while the balance falls by just 2,755.13 EUR, to 159,244.87 EUR.

After five years you have paid 47,532.60 EUR, of which 15,006.94 EUR is principal and 32,525.66 EUR interest. After ten years the balance is still 128,486.12 EUR. Half of the loan is repaid only in month 234, that is after 19.5 years. Over the whole term you pay the bank 285,194.82 EUR, of which 123,194.82 EUR is interest.

Down payment, term and rate: which matters most

All comparisons start from the example above (180,000 EUR, 10%, 4.2%, 30 years), changing one input at a time.

• A 20% down payment, or 36,000 EUR: loan 144,000 EUR, payment 704.18 EUR, total interest 109,506.50 EUR. The payment is 88.03 EUR lower and interest 13,688.32 EUR less.
• A 25-year term: payment 873.09 EUR, total interest 99,925.97 EUR. That is 80.88 EUR more per month, but interest over the life of the loan drops by 23,268.85 EUR.
• A 5.2% rate: payment 889.56 EUR, total interest 158,241.47 EUR. One percentage point adds 97.35 EUR to the payment and 35,046.65 EUR to the total cost.
• A 3.2% rate: payment 700.60 EUR, total interest 90,214.68 EUR. The payment is 91.61 EUR lower and interest 32,980.14 EUR less.

Stress-testing a floating rate

If the rate is tied to a moving base rate, the calculator's result holds only while that rate stays put. When it changes, an annuity payment is recalculated from the remaining balance over the remaining term. You can reproduce that here: enter the outstanding balance as the property price, a 0% down payment and the remaining years as the term.

In the example the balance after five years is 146,993.06 EUR with 25 years left. If the total rate is still 4.2%, you get the same 792.21 EUR. If it has risen to 5.2%, the new payment is 876.52 EUR, or 84.31 EUR more. At 6.2% the payment is 965.13 EUR, 172.92 EUR above the original.

Before borrowing, it is sensible to check whether the budget can carry the payment at a rate two percentage points higher. If it cannot, the safety margin is thin, whatever the bank thinks of your borrowing capacity.

How to read the result

The down payment is entered as a percentage of the price, and its euro amount appears under the field. The loan amount row shows what you actually borrow. Total repaid is only what goes to the bank and does not include the down payment. For the full cost of the home, add the two: in the example 18,000 + 285,194.82 = 303,194.82 EUR.

The bar above the rows shows how the total repayment splits between loan amount and interest. With a long term the interest share is large even at a low rate, because interest accrues on the balance for thirty years.

What this calculation does not include

The calculator works only with the loan amount, the rate and the term, so some costs fall outside it. When comparing several banks, enter each offer's rate separately and keep the annual percentage rate of charge from the offer alongside it. The calculator's total interest shows the cost of the nominal rate; the APRC adds the fees on top.

• Contract fees, property valuation, notary fees and state fees. These are usually paid at purchase on top of the down payment.
• Insurance and other contractual obligations that add to the monthly cost.
• Rate changes, partial early repayments and payment holidays. All of these change the schedule.
• The bank's assessment of your borrowing capacity. The calculator tells you the payment, not whether the bank will lend.