What actually makes up a mortgage payment
When people see a mortgage figure, they usually picture one number. In reality your monthly payment is four things bundled together, and lenders even have a shorthand for it: PITI — principal, interest, taxes and insurance.
The principal is the chunk that pays down what you borrowed. The interest is the lender's charge for the loan. In the early years almost all of your payment is interest and barely any touches the principal, which is why a mortgage feels like it is standing still at first. Property tax and home insurance are usually collected monthly and held until the annual bills come due. The calculator above adds all four so the headline figure is the real one you will pay, not just the bank's principal-and-interest quote.
How much house can you actually afford?
The oldest rule of thumb in lending is the 28/36 rule, and it still holds up. It says your housing costs should stay under 28% of your gross monthly income, and all your debts together — mortgage, car, loans, cards — under 36%. On a €60,000 salary that is roughly €1,400 a month for housing, less if you already carry other debt.
The Affordability tab above does this maths for you and works backwards to a sensible home price. One honest warning: being approved for an amount is not the same as it being comfortable. Lenders look at ratios; they do not see your gym membership, your kids' activities, or how much you like eating out. Borrow for the life you actually live, not the maximum a spreadsheet allows.
Five ways to shrink the payment
Put down more upfront
A bigger deposit means a smaller loan, a lower monthly payment, and often a better interest rate. It can also get you out of paying for mortgage insurance.
Shop the interest rate hard
On a sum this large, even a quarter of a percent is real money. Get quotes from several lenders — the difference over 25 years can run into tens of thousands.
Pick the right term
A longer term lowers the monthly payment but piles on interest. A shorter one costs more each month but far less overall. Try both in the calculator and see which you can live with.
Overpay when you can
Extra payments go straight to principal and snowball over time. The Extra Payments tab shows exactly how many years and how much interest you would save.
Review your insurance
Home insurance is easy to set and forget. Comparing quotes every couple of years can quietly trim your monthly cost.
Fixed or variable rate?
A fixed rate locks your interest for a set period, so your payment never moves — predictable, and a safe bet when rates are low or rising. A variable rate tracks the market, so it can fall (nice) or climb (not nice) over time. Fixed buys you certainty; variable bets on rates staying calm. Neither is automatically right — it depends on how much payment surprise you can stomach. In the eurozone, variable rates move with European Central Bank decisions, so it is worth knowing which way rates are trending before you choose.
The power of overpaying, briefly
Because mortgage interest is front-loaded, money you overpay early is worth far more than the same money later. Paying an extra €200 a month on a €200,000 loan can knock years off the term and save a serious amount of interest. It is the closest thing to a guaranteed return most homeowners will ever get — you are effectively earning your mortgage rate, risk-free. See it for yourself on the loan calculator too, which shares the same extra-payment engine.
Frequently asked questions
What deposit do I need?
It varies by country and lender, but 10–20% of the price is typical. More is better: it lowers your loan, your payment, and usually your rate, and it can remove the need for mortgage insurance.
Should I get a 20-year or 30-year mortgage?
Shorter terms cost more per month but dramatically less in total interest. If the higher payment still fits comfortably under the 28% guideline, a shorter term is usually the cheaper choice in the long run.
Does the calculator include taxes and insurance?
Yes. Enter your annual property tax and home insurance and they are spread across the monthly payment, so the total reflects what actually leaves your account.
Can I really pay my mortgage off early?
Usually, yes, and it saves a lot of interest. Check your agreement for any early-repayment charge first, then use the Extra Payments tab to see the impact.
Is this mortgage calculator free?
Completely. No signup, no stored data, use it as many times as you like.