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$500,000 Mortgage Over 20 Years
If you are thinking about borrowing $500,000 for 20 years, this page gives the payment and the full cost. It starts from 6 percent. Change it to match your own.
On the starting figures the payment is $3,582.16 a month and the total interest is $359,717.
How the payment is worked out
Every payment on a fixed loan is the same size. To find it, multiply $500,000 by the monthly rate of 0.5 percent. Then divide by one minus the reciprocal of one plus that rate raised to the power of 240. That power is the number of monthly payments in 20 years.
Worked example
Say you borrow $500,000 at 6 percent for 20 years. The payment is $3,582.16 a month. In month one, $2,500.00 pays interest and $1,082.16 reduces the balance.
After 10 years of payments you would still owe $322,657. Total interest over the whole loan is $359,717.
Questions about this calculator
Does the $3,582.16 payment cover property tax and insurance?
No. The $3,582.16 covers principal and interest only. Tax, insurance and any mortgage insurance would sit on top of it.
Is it better to put extra money toward a $500,000 mortgage over 20 years or save it elsewhere?
The calculator can only show what extra payments do. On this loan an extra $360 a month saves $64,897 of interest and ends the loan 3 years 2 months sooner. Whether that beats saving or investing the money depends on your other goals and on what you could earn elsewhere.
What if the rate on a $500,000 mortgage over 20 years were one point higher?
The payment would rise from $3,582.16 to $3,876.49, which is $294.34 more each month. One point lower would give $3,299.78.
Would paying $360 extra each month shorten a $500,000 mortgage over 20 years?
Yes. On this $500,000 loan an extra $360 each month ends the loan 3 years 2 months sooner and saves $64,897 of interest.
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This page is for education only and is not financial or tax advice.