Mortgage Life Insurance Calculator
Enter the loan, rate, term and years paid; the page shows today's balance, the year-by-year schedule, the average balance over the cover years and what your quoted premiums come to.
How to use the Mortgage Life Insurance Calculator
- Type the “Original loan amount ($)”, the amount you borrowed at the start.
- Type the “Interest rate (% a year)”. Enter 0 for an interest-free loan.
- Type the “Loan term (years)” in whole years, such as 30. Fractional years are not accepted.
- Type the whole “Years already paid”. This must be less than the loan term.
- Optional: type the “Quoted premium, falling-balance cover”.
- Optional: type the “Quoted premium, level cover”.
- Under “Quoted premiums are per”, choose month or year to match how the premiums were quoted to you.
- Open “More options” and enter “Years the cover would run”. Leave it empty to cover the rest of the loan.
- Read the results: the monthly payment, the balance still owed, the average balance, the year-by-year table and the premium comparison.
- Check any warnings. The page assumes a fixed rate, shows a warning for a rate below 0.5%, and reminds you that the two kinds of cover are different cover, so the cost difference is not a ranking.
The year-by-year table covers the first 40 years of the loan and marks the first year after the years already paid. If a field shows an error, such as a rate above 30% or cover years longer than the years left, fix that field before you read the result.
How is the monthly payment on a mortgage worked out?
The monthly payment comes from the standard amortized loan formula, M = P × i ÷ (1 − (1 + i)^−n). Here P is the original loan amount, i is the annual rate divided by 12, and n is 12 times the number of years, so a 30-year loan has 360 payments. At 0%, the formula becomes P ÷ n, which is the amount repaid in equal parts with no interest.
The formula matches the one in the LibreTexts chapter on amortized loans (CC BY-SA 4.0), where it is written as PMT. For a check, $100,000 at 6% over 30 years gives $599.55 a month. The default example on this page, $300,000 at 6.5% for 30 years, gives $1,896.20 a month.
How does the mortgage balance fall over time?
After k payments, the balance still owed is M × (1 − (1 + i)^−(n−k)) ÷ i. This is the present value of the payments still to come, so the balance is what the remaining payments are worth at the loan rate.
In the default example, 5 years paid leaves $280,833 owed, which is 93.6% of the original $300,000. For the check case, $100,000 at 6% has a balance of about $93,054 after 5 years. At 0% interest, $200,000 over 20 years is $833.33 a month, and $100,000 is owed after 10 years.
What is the average balance, and how is it used?
The average balance is the mean of the balances at the start of each covered year. It is arithmetic on the schedule, not a published figure. In the default example, the average balance over the next 25 years is $182,337, which is 64.9% of today’s balance of $280,833.
How are the two kinds of cover compared?
A falling-balance quote is compared against the average balance over the covered years. A level quote is compared against today’s balance, because the level amount does not fall. For each quote, the page multiplies the yearly premium by the covered years, then shows the cost per $1,000 a year against the balance used.
The difference between the two totals is shown, worded as not a ranking. In the quote example, $450,000 at 5.75% for 15 years with 2 years paid leaves $409,900 owed and an average balance of $245,804. A $60 a month falling-balance quote totals $9,360 over 13 years, and a $75 a month level quote totals $11,700 over the same 13 years. The difference is $2,340. These figures show the arithmetic only. This is an estimate only; get quotes from a licensed insurer or agent.
The NAIC Buyer’s Guide (2018) names paying off a mortgage among the needs that can justify coverage. It does not describe mortgage-protection or decreasing-term products, so this page makes no claims about them.
Sources (checked 15 October 2026): math.libretexts.org · insurance.ky.gov
Worked examples
| Input | Result |
|---|---|
| $300,000 at 6.5% for 30 years, 5 paid | $1,896.20 a month, $280,833 still owed |
| $450,000 at 5.75% for 15 years, 2 paid | $3,736.85 a month, $409,900 still owed |
| $200,000 at 0% for 20 years, 10 paid | $833.33 a month, $100,000 still owed |
| $300,000 at 6.5% for 30 years, 5 paid | $1,896.20 a month, $280,833 still owed |
Calculated by the tool above; open it with the same values to see each step.
Frequently asked questions
Frequently asked questions
Is the result a quote for mortgage life insurance?
No. The page gives an estimate from the numbers you type. It is not a quote and not advice, and it does not price cover. Ask a licensed agent or advisor about your own situation.
What is the difference between falling-balance cover and level cover?
Falling-balance cover is compared against the average balance over the covered years. Level cover is compared against today’s balance. The two kinds are different cover, so the page shows them side by side without ranking them.
Why does the page assume a fixed rate?
The payment and balance figures assume the interest rate stays the same for the whole term. If your loan rate changes, your actual schedule will differ from the figures shown.
Why does the page show a warning for a rate below 0.5%?
The warning asks you to check that you typed percent, not a decimal. Rates above 30% are rejected as an error, so the rate field should be checked before you read the result.
Why won’t the page accept my inputs?
It rejects a loan of zero, a value that is not a number, years paid that are not below the term, fractional years, a rate above 30%, and cover years longer than the years left. Correct the flagged field and try again.
Does the page store or send my numbers?
Everything runs in your browser and nothing is uploaded.
Related tools
- All Life Insurance Calculators: the hub with every life insurance page on this site.
- Life Insurance Cost Calculator: use it to compare the cost of a life insurance policy across the premiums you enter.
- How Much Life Insurance Do I Need?: use it to work through the amount of cover that fits your own situation.
- Term Life Insurance Calculator: use it to look at the cost of cover for a fixed term.
- Whole Life Insurance Cost Calculator: use it to look at the cost of cover that lasts for the whole of your life.
- Home and Rental Coverage: worksheets for homeowners, renters and landlords.