How much of a mortgage payment is interest
Of the first 1,896.20 payment on a 300,000 mortgage at 6.5% over 30 years, 1,625.00 is interest and only 271.20 comes off the debt. The interest share falls every month as the balance does, but the two halves of the payment do not cross until month 233, more than nineteen years in. A full year of payments reduces the balance by 3,353.13.
Year by year
| 1 | $22,754.40 | $19,401.27 | $3,353.13 | $296,646.87 | $19,401.27 |
| 2 | $22,754.40 | $19,176.71 | $3,577.69 | $293,069.18 | $38,577.98 |
| 3 | $22,754.40 | $18,937.10 | $3,817.30 | $289,251.89 | $57,515.09 |
| 4 | $22,754.40 | $18,681.45 | $4,072.95 | $285,178.94 | $76,196.54 |
| 5 | $22,754.40 | $18,408.68 | $4,345.72 | $280,833.22 | $94,605.22 |
| 6 | $22,754.40 | $18,117.64 | $4,636.76 | $276,196.46 | $112,722.86 |
| 7 | $22,754.40 | $17,807.11 | $4,947.29 | $271,249.17 | $130,529.97 |
| 8 | $22,754.40 | $17,475.78 | $5,278.62 | $265,970.54 | $148,005.74 |
| 9 | $22,754.40 | $17,122.26 | $5,632.14 | $260,338.40 | $165,128.00 |
| 10 | $22,754.40 | $16,745.06 | $6,009.34 | $254,329.06 | $181,873.06 |
| 11 | $22,754.40 | $16,342.61 | $6,411.79 | $247,917.27 | $198,215.67 |
| 12 | $22,754.40 | $15,913.20 | $6,841.20 | $241,076.07 | $214,128.87 |
An estimate, not financial advice. Figures are illustrative and depend on assumptions listed below. Check anything you plan to act on with a qualified adviser or the provider itself.
The worked example, drawn. The debt falls slowly at first and the interest line crosses it well before the end.
In the first year you pay 22,754.40 and the balance falls by 3,353.13. The other 19,401.27 of it is interest.
The monthly split does not reach even until month 233 of 360, so for roughly two thirds of the term most of each payment is interest.
Interest over the full term comes to 382,636.50 on a 300,000 loan, so the borrowing costs more than the house did, before any fees.
How it works
The formula
i = annual rate / 12 (or (1 + annual rate)^(1/12) - 1)
n = 12 x term in years
payment = P x i x (1 + i)^n / ((1 + i)^n - 1)
Then, for each month until the balance reaches zero:
interest = balance x i
balance = balance + interest - (payment + overpayment)
The final payment is whatever settles the balance, so it is
a few pounds different from all the others.
where
P = amount borrowed, less any one-off overpayment
i = the monthly interest rate
n = the number of contractual payments
What it assumes
- The rate never changes. A fixed deal lasts two to five years, not the whole term, so the payment shown after the fix ends is a guess and nothing more.
- Interest is charged on the balance at the start of each month and the payment is applied at the end of it. This is the ordinary-annuity convention the payment formula itself assumes, and the two have to agree or the schedule will not finish where the formula says it should.
- Interest is carried at full precision rather than rounded to the penny each month. A lender that rounds monthly will differ by a few pence over a 30-year term.
- Overpayments are assumed to shorten the term, not to reduce the payment. That is the default at nearly every lender, but it is worth checking, because the alternative saves far less.
- The one-off overpayment is credited with the first month's payment, so it earns its full saving from the start.
- Nothing else is included. Product fees, valuation fees, buildings insurance, ground rent, service charges and any tax are all on top of the figure shown.
Common questions
When does the split reach half and half?
Later than most people expect. On a 25-year mortgage at 5% the crossover — the first payment where more goes on capital than on interest — is around year nine. A higher rate pushes it later and a shorter term pulls it forward; the schedule shows the exact month for your figures.
Why does my lender’s statement show a different interest figure?
Because most lenders charge interest daily on the balance as it actually stood, while a repayment schedule works in whole months. The two agree closely over a year and differ by a few units of currency in any single month, more so if your payment date moves or you overpay mid-month.
Sources
Method written and checked by Tessalor on Jul 30, 2026.
The full method, worked example and every assumption behind this figure are on Mortgage Repayment Calculator.