Debt2Capital™ concept calculator

True Cost Mortgage Calculator

A mortgage rate tells you how interest is calculated. The Effective Interest Cost (EIC) shows how much of a specific monthly payment is interest instead of principal.

EIC = monthly interest portion ÷ total monthly payment

Book example

Loan balance
$100,000
Interest rate
4.00%
Monthly payment
$477.42
Monthly interest
$333.34
Effective Interest Cost
69.8%

Enter your numbers

Use your current outstanding principal balance, not the original home price.
For EIC, use the loan payment amount you want to analyze. If your escrow taxes/insurance are included, you may enter principal+interest only for a cleaner loan-cost view.
Please enter positive numbers. Payment must be greater than zero.
Your result
Effective Interest Cost69.83%
Monthly interest portion$333.33
Principal bought back$144.09
69.83% interest30.17% principal

How the calculator works

1. Calculate monthly interestCurrent balance × annual interest rate ÷ 12 months.
2. Compare it to the paymentMonthly interest ÷ total monthly payment.
3. Interpret the resultThe percentage tells you how much of this payment is going to interest before principal reduction.

Educational calculator only. It simplifies the mortgage math to show the embedded interest in the next payment. It is not financial, legal, tax, lending, or insurance advice. Confirm loan details with the lender’s amortization schedule and a qualified professional before making decisions.