Investment Property Mortgage Calculator
Monthly payment, full PITI and a year-by-year amortization schedule for a rental property loan — with the interest you save by paying extra principal.
Where each payment goes, year by year
Your payment never changes, but what it buys does. Step through the loan: in year one most of it is interest; around year 21 principal finally takes the larger share — and every dollar of principal is equity your tenant paid for.
Year 1: $16,241 interest · $2,178 principal
12% to equity
Amortization schedule
| Year | Paid | Interest | Principal | Balance |
|---|---|---|---|---|
| 1 | $18,419 | $16,241 | $2,178 | $222,822 |
| 2 | $18,419 | $16,078 | $2,341 | $220,481 |
| 3 | $18,419 | $15,902 | $2,516 | $217,965 |
| 4 | $18,419 | $15,714 | $2,705 | $215,260 |
| 5 | $18,419 | $15,511 | $2,908 | $212,352 |
| 6 | $18,419 | $15,293 | $3,126 | $209,227 |
| 7 | $18,419 | $15,059 | $3,360 | $205,866 |
| 8 | $18,419 | $14,807 | $3,612 | $202,255 |
| 9 | $18,419 | $14,536 | $3,883 | $198,372 |
| 10 | $18,419 | $14,245 | $4,174 | $194,198 |
Financing a rental: what changes
Fannie Mae and Freddie Mac allow conventional loans on 1–4 unit investment properties, generally with at least 15% down on a single-family rental and 25% on 2–4 units, and they add loan-level price adjustments that raise the rate. Many investors instead use DSCR loans, which skip personal income verification and qualify on rent — see the DSCR calculator.
Because interest is deductible against rental income and principal is not, the schedule above is also a tax preview: the interest column is roughly what lands on Schedule E each year.
Questions investors ask
How are investment property mortgages different?
Lenders price investment property loans higher than owner-occupied ones — typically around half a point to a point more — and usually require 15–25% down. Conventional lenders count 75% of expected rent as income; DSCR lenders qualify the loan on the property’s rent alone.
What is an amortization schedule?
An amortization schedule lists every payment over the loan’s life and splits it into interest and principal. Early payments are mostly interest because interest is charged on a large balance; as the balance falls, more of each payment goes to principal.
Should I make extra payments on a rental mortgage?
Extra principal saves interest at your mortgage rate, a guaranteed return. But it also lowers your cash-on-cash return and ties up cash you might need for repairs or the next down payment. Many investors keep reserves first and prepay only when the mortgage rate beats their alternative uses of cash.
Is mortgage interest on a rental deductible?
Yes. For a rental property, mortgage interest is deducted as a rental expense on Schedule E (IRS Publication 527), not as an itemized deduction. Principal is not deductible, which is why the interest/principal split in the schedule matters at tax time.