Mortgage instalment calculator

Taking out a mortgage is often a significant and long-term financial commitment. Before applying for a mortgage, it's important to carefully assess your saving capacity, based on your present and future income and expenses.

This calculator helps you estimate the amount of each instalment based on the loan amount you need, interest rate, and repayment term. To avoid financial strain, it is advisable that your instalment does not exceed one third of your net income.

Each instalment is made of two parts:

• principal, the portion of the amount borrowed that you are paying back to the bank;
• interest, the amount charged on the outstanding balance.

Interest is the main cost of a mortgage. However, there are other expenses which, for simplicity, are not included in our simulations. The additional charges may include notary fees, taxes, application and administrative fees, instalment collection fees, and insurance premiums.

Before applying for a mortgage loan, it is important to consider the APR (Annual Percentage Rate). The APR represents the real cost of the loan, including most of the fees and charges. The APR must be clearly communicated to you by the lender before you sign the mortgage agreement.

There are different methods for repaying a mortgage. This calculator uses the French repayment method, which is the most common in Italy. With this method, each instalment remains fixed over time and consists of a gradually increasing principal portion and a decreasing interest portion.

In our simulations, both the interest rates and the instalment amount remain fixed throughout the term of the mortgage, as is the case with fixed-rate mortgages. If you have a variable-rate mortgage, you can use the calculator to simulate how your monthly payment might change if interest rates rise or fall after the loan has started. In this case, enter the outstanding balance of the loan and the remaining repayment period.

For simplicity, we haven't set limits on the interest rate you can enter. Please visit Banca d'Italia's website to check the thresholds beyond which interest rates are considered unlawful.