Mortgage
Calculate monthly mortgage payment, total interest, and amortization schedule. Compare Price vs. SAC systems.
Financing a home buys the house, and then you spend a decade or three paying interest. This calculator shows the full picture: your monthly payment, total interest over the life of the loan, and how each payment splits between principal and interest as time passes.
You can switch between two amortization systems. Price keeps the monthly payment flat (the US default). SAC keeps the principal portion flat, so payments start high and shrink (the Brazilian default). Running both side by side usually makes the trade-off obvious.
How mortgage amortization works
Price (French amortization) keeps your monthly payment constant for the entire term. Early on, most of each payment goes to interest; over time, the principal share grows. It's predictable and easy to budget, but total interest is higher than SAC at the same rate and term.
SAC (Constant Amortization System) keeps the *principal* portion constant. Since the balance shrinks each month, interest shrinks too — so early payments are large and later payments are small. Total interest paid is lower.
Both systems accrue interest on the outstanding balance monthly. The *loan amount* is home price − down payment; the mortgage calculator turns that plus rate and term into a payment stream.
PMT = P · r / (1 − (1 + r)^−n)
- PMT
- Monthly payment (constant)
- P
- Loan amount (home price − down payment)
- r
- Monthly interest rate (annual / 12)
- n
- Total number of monthly payments
Practical examples
Typical US purchase
Setup: $300,000 home, 20% down ($60,000), 30 years at 6.5%.
Loan = $240,000. Monthly payment ≈ $1,517. Total interest ≈ $306,030.
Takeaway: Over 30 years, interest nearly matches the loan amount — that's why a small rate change makes a huge total difference.
Typical Brazilian purchase (SAC)
Setup: R$ 400.000 home, R$ 80.000 down, 30 years at 11%.
Loan = R$ 320.000. First payment ≈ R$ 3.822; last payment ≈ R$ 898; total interest ≈ R$ 530k.
Takeaway: High early payments but total interest is lower than Price would be at the same inputs. Budget-constrained borrowers often prefer Price; interest-sensitive borrowers prefer SAC.
Effect of rate
Setup: Same $240,000 loan, 30 years, Price: at 6% payment is $1,439 and total interest is $278k. At 8%, payment is $1,761 and total interest is $394k.
2 percentage points of rate = ~$116k extra over 30 years.
Takeaway: Shop rates aggressively. The difference compounds over decades.
Practical tips
- Put more down if you can afford to. A larger down payment reduces both the monthly payment and total interest, and in the US may eliminate PMI (private mortgage insurance).
- Shorter term = more payment, far less interest. A 15-year term typically costs ~50% more per month than 30 years but saves two-thirds of total interest.
- Extra payments front-loaded are gold. An extra $200/month on a 30-year loan can cut 5+ years off the term. A one-time lump sum early in the loan has outsized impact because the remaining interest grows on the untouched balance.
- Rate matters more than fees. A low-rate loan with higher closing costs is often cheaper overall than a high-rate low-fee one. Compare the effective cost over the expected holding period.
When this calculator is not enough
This calculator doesn't include property taxes, homeowner insurance, HOA fees, PMI, or closing costs. Those can add 20–30% to your true monthly cost. Check local rates separately.
For adjustable-rate mortgages (ARMs), the rate changes on a schedule — this calculator assumes a fixed rate.
For Brazilian SFH/SFI loans with TR correction or for IPCA+ index mortgages, the interest rate isn't constant — you'd need a calculator that models the index path.
Frequently asked questions
Should I pick Price or SAC?▾
If your monthly budget is tight, Price keeps the payment flat and predictable. If you can absorb a higher first payment and want to minimize total interest, SAC wins — you pay off principal faster.
Why is the loan so interest-heavy at the start?▾
Each month's interest is calculated on the outstanding balance. When the balance is large (early in the loan), interest is large — so most of your Price payment goes to interest. As principal gets paid down, that flips.
Is it better to pay off a mortgage early?▾
Mathematically, any extra payment saves interest. But compare the mortgage rate to what that money could earn elsewhere (investments, retirement account). If your rate is 6% and you can reliably earn 8%, investing wins. If your rate is 10%+, paying off the mortgage is usually better.
What is amortization?▾
Amortization is the schedule showing how each payment is split between interest and principal over the life of the loan. The yearly table here summarizes that — a full amortization schedule lists every month.
Why doesn't this include taxes and insurance?▾
Those vary enormously by location (property tax in Texas vs. California, for example) and by insurer. Adding them without local data would be misleading. Get a quote for your specific home and add it to the monthly number shown here.
Sources
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