Mortgage Calculator · Practical guide
Total Interest on a 30-Year Mortgage
At today's rates you can easily pay more interest than you borrowed — the rate table shows exactly how much.
At a glance
The Short Answer
At 6.5%, a 30-year mortgage costs about $1.28 in interest for every $1 borrowed. On a $320,000 loan, total interest is $408,142 — more than the loan itself. The lower the rate, the smaller the multiple; at 5% the same loan costs $298,419 in interest.
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Enter your own values, then compare the result with the examples below.
Mortgage Summary
| Year | Interest | Principal | Balance |
|---|
| Month | Interest | Principal | Balance |
|---|
Total Interest by Rate ($320,000, 30-Year Term)
| Interest Rate | Monthly Payment | Total Interest | Interest per $1 Borrowed |
|---|---|---|---|
| 5% | $1,717.83 | $298,419 | $0.93 |
| 6% | $1,918.56 | $370,682 | $1.16 |
| 6.5% | $2,022.62 | $408,142 | $1.28 |
| 7% | $2,128.97 | $446,428 | $1.40 |
Why the Interest Is So Large
Interest is charged monthly on the remaining balance, and a 30-year balance shrinks slowly — after a full year of payments on the 6.5% loan, less than $4,000 of principal is gone. Most of every early payment is interest, and the sheer length of the term lets that interest accumulate.
Four Ways to Pay Less Interest
- Shorten the term. A 15-year version of the same loan costs $181,758 in interest — a $226,385 saving.
- Make extra principal payments. An extra $200 per month saves about $105,429 and pays the loan off 79 months early.
- Improve your rate. Dropping from 6.5% to 6% saves about $37,460; better credit and discount points can get you there.
- Borrow less. A larger down payment shrinks the balance every interest charge is calculated on.
Frequently Asked Questions
Is mortgage interest tax deductible?
Interest on up to $750,000 of acquisition debt is deductible if you itemize. With today's higher standard deduction, many homeowners no longer itemize, so the deduction may not apply to you.
How much interest do I pay in the first year?
On a $320,000 loan at 6.5%, roughly $20,700 of the first year's $24,271 in payments is interest — about 85%. The share declines slowly from there.
Does a bigger down payment reduce total interest?
Yes, proportionally. Borrowing $280,000 instead of $320,000 at 6.5% lowers total interest from $408,142 to about $357,125.
Can I deduct PMI along with mortgage interest?
The PMI deduction has come and gone with tax legislation and is income-limited when available. Check current IRS rules or a tax professional for the year in question.