Mortgage Interest Calculator
Compute the total interest, total repayment and monthly payment of a mortgage over its full term to see the true cost of home ownership.
Input Data
Results
At a glance:Mortgage interest is the cost of borrowing to buy a home. Monthly payment M = L × (r/1200) ÷ (1 − (1 + r/1200)^(−12t)), where L is the loan, r the annual rate (%) and t the term in years. Total repayment = M × 12t; total interest = total repayment − L.
Formula
Monthly rate = annual rate% ÷ 1200.
Monthly payment = loan × monthly rate ÷ (1 − (1 + monthly rate)^(−12 × term)).
Total interest = monthly payment × 12 × term − loan.
$$\\text{Monthly payment} = P \\times \\dfrac{r(1+r)^n}{(1+r)^n - 1}$$$$\\text{Total repayment} = \\text{Monthly payment} \\times n$$$$\\text{Total interest} = \\text{Total repayment} - P \\quad (r = \\text{Annual rate}/12,\\; n = \\text{Term (years)}\\times 12)$$How to Use
- Enter the mortgage loan amount.
- Enter the annual interest rate and the term in years.
- Read the monthly payment, total interest and total repayment.
FAQ
Why is the total mortgage interest so high?
A mortgage is large and long (typically 25–30 years), so interest compounds over a long time. The longer the term, the slower the principal is repaid and the longer interest accrues, pushing total interest up. Shortening the term or securing a lower rate can cut the interest substantially.
Are Hong Kong mortgages floating or fixed? Is the result accurate?
Most Hong Kong mortgages are floating (tied to HIBOR or the Prime rate) and move with the market. This tool assumes a fixed rate and is an estimate; the actual interest changes with rate movements, so use the current rate as a reference and recalculate periodically.
How much interest can early repayment save?
Repaying part of the principal early reduces the outstanding balance and therefore the future interest. The saving depends on when and how much you repay — the earlier and the larger, the more you save. Note that a penalty may apply within the penalty period.
Which saves more total interest — a shorter term or a lower rate?
Both help, but through different mechanisms, so ideally do both. Shortening the term directly cuts the number of interest-charging periods — e.g. taking a HK$3,000,000 mortgage from 30 to 20 years cuts total interest from about HK$1.55m to about HK$0.99m, saving over HK$550k; the cost is a higher monthly payment (about HK$12,648 to HK$16,638), which you must afford and pass the bank's income and stress tests. A lower rate cuts the rate on every period — the same 30-year mortgage at 3% instead of 4% saves about HK$600k in total interest while the monthly payment actually falls, friendlier to cash flow, so it is worth watching bank quotes and refinancing opportunities. In practice: pick a shorter term within your budget, then push for a low rate and cash rebate; if the term is fixed, lower the rate by watching the market and refinancing at the right time. Warning: shortening the term raises the monthly payment and the stress-test threshold, so confirm affordability first.
Is this total-interest figure accurate? Will it match what the bank charges?
This calculator uses the standard equal-instalment, monthly-compounding model; the total interest is a theoretical estimate under a 'fixed rate' assumption, reliable in direction and magnitude for comparing terms and rates, but it will differ slightly from the bank's actual interest for several reasons. First, Hong Kong mortgages are mostly floating (H-Plan tracks HIBOR, P-Plan tracks Prime), so the actual rate moves with the market and total interest changes accordingly, whereas this tool assumes a fixed rate. Second, the bank's actual interest accrual may differ slightly from the simplified model in accrual dates, rounding and payment dates. Third, if you make a partial early repayment or refinance mid-way, the actual total interest will be lower than this tool's estimate. Fourth, this tool counts only interest and excludes other home-buying costs like mortgage insurance, legal fees and valuation fees. Treat the result as an estimate and for comparing plans; the actual interest and payments follow the bank's quote and repayment schedule.
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References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.