Mortgage Monthly Payment Calculator
From the mortgage principal, annual rate and term, compute the monthly payment, total repayment and total interest to compare rate scenarios.
Input Data
Results
At a glance:The mortgage rate decides the monthly payment. Monthly payment M = P × (r/1200) ÷ (1 − (1 + r/1200)^(−12t)), where P is principal, r the annual rate (%) and t the term in years. Total payment = M × 12t; total interest = total payment − P.
Formula
Monthly rate = annual rate% ÷ 1200.
Monthly payment = principal × monthly rate ÷ (1 − (1 + monthly rate)^(−12 × term)).
Total interest = monthly payment × 12 × term − principal.
$$\\text{Monthly payment} = P \\times \\dfrac{r(1+r)^n}{(1+r)^n - 1}$$$$\\text{Total repayment} = \\text{Monthly payment} \\times n, \\quad \\text{Total interest} = \\text{Total repayment} - P$$$$r = \\dfrac{\\text{Annual rate}}{12}, \\quad n = \\text{Term (years)} \\times 12$$How to Use
- Enter the mortgage principal.
- Enter the annual rate and term in years.
- Read the monthly payment, total payment and total interest.
FAQ
How is the monthly payment worked out?
The most common repayment method is equal instalments (a fixed monthly amount), using the standard annuity formula: M = P × (r/1200) ÷ (1 − (1 + r/1200)^(−12t)), where P is the principal, r the annual rate (%) and t the term in years. The formula is designed so that the same fixed payment exactly clears the principal and interest by the end. Although the payment is constant, the split between interest and principal shifts over time: early on, with a large outstanding balance, most of the payment is interest and only a little repays principal; later, as the balance falls, the interest share drops and the principal share grows. For HK$3m at 3% over 30 years, this gives about HK$12,648 a month, and the tool also derives the total payment (payment × periods) and total interest (total − principal).
How much do the rate and term affect total interest?
The rate and the term are the two biggest drivers of total cost, and their impact is usually larger than people expect. On the rate: because interest accrues on the falling balance over 20–30 years, even a small rate rise adds up to a sizable interest gap. On HK$3m over 30 years, moving from 3% to 4% raises the monthly payment noticeably and adds a large chunk of total interest over the term — which is why rate rises are such a concern in a floating-rate environment. On the term: a longer term lowers the monthly payment (principal spread thinner) but you hold the principal longer, so total interest rises substantially; the same loan's 30-year interest far exceeds its 20-year interest. So the term is a trade-off: shorter term means higher payments but less interest and an earlier debt-free date; longer term eases cash flow but costs more interest. Use this tool to test different rates (e.g. comparing banks or simulating a rate rise) and terms and see the monthly and total-interest effects directly.
What practical factors should I also consider besides the numbers?
The payment, total and interest here are theoretical under simplified assumptions; real homeownership has more moving parts. First and most important: Hong Kong mortgages are mostly floating — the market mainstream is H-Plan (linked to HIBOR, usually with a P-based rate cap) and P-Plan (linked to Prime) — so your actual rate moves with the market and the payment/interest will change; treat this tool's fixed-rate result as an estimate 'if rates stay as entered', and re-run at a higher rate (e.g. +2%) to check affordability under a rise. Second, the debt-servicing ratio (DSR) and stress test: banks check not only the current-rate DSR (capped) but also a stressed DSR assuming a rate rise, so how much you can borrow depends on more than the payment figure. Third, the LTV and mortgage insurance: a higher-ratio mortgage to cover a thin down payment may require mortgage insurance, adding cost. Fourth, other costs — legal fees, valuation fees, stamp duty — are outside the monthly payment but still part of buying. Fifth, this tool uses a simplified equal-instalment, monthly-compounding model that may differ slightly from the bank's actual accrual. Use it for quick estimates and comparisons; the actual payment and borrowable amount follow the bank's approval and quote, and for big decisions consult the bank or a licensed mortgage broker.
What is the difference between H-Plan and P-Plan, and which rate should I enter?
Hong Kong floating mortgages come in two main types. H-Plan rate = HIBOR plus a fixed spread (e.g. H+1.3%); because HIBOR moves monthly, the H-Plan rate floats, but to guard against a sharp HIBOR spike it usually has a 'cap' (a lock rate set as Prime minus some percentage) — if the H-Plan rate exceeds the cap, the cap applies. P-Plan rate = the bank's Prime rate minus a margin (e.g. P−2%); Prime is set by the bank and moves more smoothly than HIBOR. When using this tool, enter the actual rate you currently face (the H-Plan rate as calculated, or the P-Plan P-minus rate), and because the rate floats, also re-run at a higher rate (e.g. +2%) to see whether you could still afford the payment after a rise. The actual rate and cap follow the bank's quote and contract.
What are the 'debt-servicing ratio' and the 'stress test', and do they affect how much I can borrow?
Yes — and substantially: they decide whether you can borrow the amount you want, not just the payment figure. The debt-servicing ratio (DSR) is your total monthly debt payments (this mortgage plus any other loans) as a percentage of your monthly income; banks set a cap per regulatory guidance (varying with property price, owner-occupancy, etc.), and exceeding it means a smaller loan or adding a co-borrower. The stress test re-computes your payment assuming a rate rise of a certain amount and checks the DSR stays within the allowed range under that scenario; failing it means you cannot borrow the ideal amount. Both exist to ensure borrowers have a buffer against rate rises and avoid over-borrowing. So after getting the payment from this tool, remember: first, confirm the current payment is a reasonable share of your income; second, re-run at a higher rate (simulating the stress test) to confirm you can still pay after a rise. The actual DSR cap and stress-test requirements follow the bank and the latest HKMA guidance.
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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.