Rental Property Mortgage Calculator
Calculate your monthly mortgage payment, total amount paid, and total interest for a rental property loan based on loan amount, interest rate, and term.
Results
Visualization
How It Works
A rental property mortgage calculator computes your fixed monthly payment using the standard amortization formula. It breaks down how much of your total payments go toward principal (the amount you borrowed) versus interest (the cost of borrowing). For investment property loans, rates are typically 0.5-0.75% higher than primary residence rates.
The Formula
Variables
- P — Loan principal — the amount borrowed after subtracting your down payment
- r — Monthly interest rate — annual rate divided by 12
- n — Total number of monthly payments — loan term in years multiplied by 12
- M — Fixed monthly mortgage payment including principal and interest
- Total Interest — Cumulative interest paid over the full loan term
Worked Example
You borrow $280,000 at 7.5% for 30 years. Monthly rate r = 0.075/12 = 0.00625. Number of payments n = 360. Monthly payment M = $280,000 x [0.00625(1.00625)^360] / [(1.00625)^360 - 1] = $1,958.33. Total paid = $1,958.33 x 360 = $704,999. Total interest = $704,999 - $280,000 = $424,999. You pay more in interest than the original loan amount.
Practical Tips
- Investment property loans typically carry rates 0.5-0.75% higher than primary residence mortgages.
- A 15-year term dramatically reduces total interest — often by more than 50% — but raises monthly payments.
- Even a 0.25% rate reduction on a $280,000 loan saves roughly $17,000 over 30 years.
- Your monthly payment covers only principal and interest — budget separately for taxes, insurance, and maintenance.
- Consider making one extra payment per year to shave 4-5 years off a 30-year mortgage.
Frequently Asked Questions
What is a good mortgage rate for rental property?
As of early 2026, investment property rates range from 7-8.5% depending on credit score, down payment, and loan type. Rates for rental properties are always higher than owner-occupied rates because lenders see them as riskier.
How much of my payment goes to interest vs principal?
In the early years, most of your payment goes to interest. On a 30-year $280,000 loan at 7.5%, your first payment is about $1,750 interest and only $208 principal. This ratio gradually shifts over time.
Should I choose a 15-year or 30-year mortgage for a rental?
A 30-year mortgage gives lower monthly payments and better cash flow, which matters for rental properties. A 15-year mortgage builds equity faster and saves massively on interest, but may leave you cash-flow negative.
Does this calculator include taxes and insurance?
No. This calculates principal and interest (P&I) only. Your actual monthly housing cost includes property taxes, insurance, and possibly PMI and HOA fees. Budget an additional 30-50% beyond P&I for these costs.
How does the amortization formula work?
It calculates a fixed payment that, over the loan term, will pay off exactly the principal plus accumulated interest. Early payments are mostly interest because the balance is high. As the balance shrinks, more of each payment goes to principal.