Calculate the monthly payment of a home loan, how much interest you pay in total, and see the debt shrink year by year.
| Year | Payment | Principal | Interest | Remaining balance |
|---|---|---|---|---|
| 1 | $22,754 | $3,353 | $19,401 | $296,647 |
| 2 | $22,754 | $3,578 | $19,177 | $293,069 |
| 3 | $22,754 | $3,817 | $18,937 | $289,252 |
| 4 | $22,754 | $4,073 | $18,681 | $285,179 |
| 5 | $22,754 | $4,346 | $18,409 | $280,833 |
| 6 | $22,754 | $4,637 | $18,118 | $276,196 |
| 7 | $22,754 | $4,947 | $17,807 | $271,249 |
| 8 | $22,754 | $5,279 | $17,476 | $265,970 |
| 9 | $22,754 | $5,632 | $17,122 | $260,338 |
| 10 | $22,754 | $6,009 | $16,745 | $254,328 |
| 11 | $22,754 | $6,412 | $16,343 | $247,916 |
| 12 | $22,754 | $6,841 | $15,913 | $241,075 |
| 13 | $22,754 | $7,299 | $15,455 | $233,776 |
| 14 | $22,754 | $7,788 | $14,966 | $225,987 |
| 15 | $22,754 | $8,310 | $14,445 | $217,677 |
| 16 | $22,754 | $8,866 | $13,888 | $208,811 |
| 17 | $22,754 | $9,460 | $13,294 | $199,351 |
| 18 | $22,754 | $10,094 | $12,661 | $189,257 |
| 19 | $22,754 | $10,770 | $11,985 | $178,487 |
| 20 | $22,754 | $11,491 | $11,263 | $166,996 |
| 21 | $22,754 | $12,261 | $10,494 | $154,735 |
| 22 | $22,754 | $13,082 | $9,673 | $141,653 |
| 23 | $22,754 | $13,958 | $8,797 | $127,695 |
| 24 | $22,754 | $14,893 | $7,862 | $112,803 |
| 25 | $22,754 | $15,890 | $6,864 | $96,912 |
| 26 | $22,754 | $16,954 | $5,800 | $79,958 |
| 27 | $22,754 | $18,090 | $4,665 | $61,868 |
| 28 | $22,754 | $19,301 | $3,453 | $42,567 |
| 29 | $22,754 | $20,594 | $2,161 | $21,973 |
| 30 | $22,754 | $21,973 | $781 | $0 |
Every payment is split into two parts: interest on the outstanding balance and principal that reduces the debt. In the early years the balance is high, so most of the payment is interest. As the balance falls, the interest share shrinks and you build equity faster.
PMT = P × i / (1 − (1 + i)⁻ⁿ)
PMT is the monthly payment, P the loan amount, i the monthly rate (annual rate ÷ 12) and n the number of months. With the SAC system the principal is amortized in constant slices (P ÷ n), so payments start higher and decrease every month.
This simulation covers principal and interest only. Real mortgages also include insurance, property taxes and fees, and rates can adjust — check the full cost (CET / APR) with your lender.
A $300,000 loan at 6.5% per year over 30 years costs $1,896 a month. In the first year about 85% of each payment is interest — the debt barely moves. Keep the loan to the end and you pay $382,633 in interest alone: more than the amount borrowed.
Cut the term to 15 years and the payment rises to $2,613, but total interest falls to $170,398 — a saving of over $212,000. That is the trade-off to test above: a higher payment you can afford today versus decades of interest.
With the Price system the payment is constant for the whole term. With SAC (constant amortization), the principal is reduced by a fixed amount every month, so payments start higher than Price and decrease over time. SAC usually pays less total interest, but demands a higher income at the start.
Because the balance stays large for many years and interest is charged on it every month. On long terms it is common for total interest to approach or exceed the amount borrowed. Shortening the term or making extra principal payments reduces it dramatically.
No. It simulates only principal and interest at a fixed rate. Add property tax, homeowner's insurance and any lender fees to the monthly payment to estimate the real monthly cost.
Estimates for educational purposes only, based on constant rates. Real investments and loans vary — consult a qualified professional before making financial decisions.