Interest vs Principal Calculator
See how a mortgage payment splits between interest and principal, when principal finally overtakes interest, and what is still owed at any year.
Are you a real estate agent or broker? Agents use this to answer a buyer question and capture the buyer in the same link: one page, your branding, WhatsApp enquiries. Create free agent page →
A repayment mortgage charges interest on what is still owed, so the same fixed payment buys very different things at the start and the end of a term. Early on it is almost all interest; late on it is almost all principal.
Two facts usually surprise borrowers: how long it takes before principal exceeds interest in a single payment, and how little the balance moves in the first few years of a long loan. Both are shown here.
How the split works
Each month the lender charges interest on the balance outstanding: interest = balance × (annual rate ÷ 12). Whatever is left of your fixed payment reduces the balance. Because the balance falls, the interest portion shrinks and the principal portion grows every month.
Worked example
Borrow 300,000 at 6.5% over 25 years and the payment is about 2,025. In month one, interest is 300,000 × 0.005417 = 1,625, so only 400 comes off the balance. Principal does not overtake interest until roughly year 14, and half the loan is still outstanding around year 17 — well past the halfway point of the term.
Why it matters
It explains why selling or refinancing early feels like it achieved nothing, and why an overpayment in the first years is worth several times the same amount later.
One page per property, ready in minutes
Photos, price, location, the documents a buyer asks for, and this calculator — on a page you can send in a single link. No website build, no coding.
Create your free property pageFrequently asked questions
Why does my balance barely move in the early years?
Because interest is charged on the outstanding balance, which is at its maximum at the start. Most of an early payment is consumed by interest, leaving little to reduce the debt. This is normal on every amortising loan, not a sign of a problem.
When does principal overtake interest?
It depends on the rate and term. On a long loan at a high rate it can take more than half the term. The calculator gives the exact month for your figures.
Does a shorter term change the split?
Substantially. A shorter term means a higher payment, more of which is principal from the very first month, so the crossover happens much sooner and the total interest is far lower.
More home loan calculators
Mortgage payment
Monthly repayment, total interest and the true cost of the loan.
Home loanOverpayment saving
What paying extra each month actually saves.
Home loanRefinance break-even
Whether switching lender is worth the fees.
Home loanOverpay or invest
Guaranteed interest saved vs an assumed return.
Home loanBorrowing power
Start from the payment, not the property price.
Home loanRate change impact
What a rate move does to your payment and your total.
Home loanBridging loan cost
The real cost of short-term property finance.
Home loanFee vs rate comparison
Whether the low rate with a big fee is really cheaper.
Home loanOffset mortgage benefit
Whether offsetting beats leaving the money in savings.
Home loanPayment holiday cost
What pausing payments costs across the rest of the loan.
Home loanInterest only vs repayment
The monthly saving, and what it costs in the end.
Home loanMortgage term comparison
What a shorter term costs monthly and saves overall.