Money & finance

Loan & Mortgage Calculator

Enter the amount, interest rate and term. See your payment, how much interest you will pay and the amortization schedule payment by payment.

Step by step

    Amortization schedule

    How a loan payment is calculated

    Most loans and mortgages are repaid with a fixed payment each period. The formula is:

    Payment = P · i / (1 − (1 + i)−n)

    P is the amount borrowed, i the interest rate per period (annual rate / 12 for monthly payments) and n the number of payments. In each payment, part goes to interest (balance × i) and the rest repays principal. At the start almost everything is interest; at the end, almost everything is principal.

    Example · $250,000 mortgage at 6.5% over 30 years

    i = 0.065 / 12 = 0.5417%, n = 360. Monthly payment = $1,580.17. The first payment includes $1,354.17 of interest and only $226 of principal. Over 30 years you pay about $318,861 in interest, more than the loan itself.

    Fixed payment or constant principal?

    • Fixed payment (the standard for mortgages and car loans): every payment is the same.
    • Constant principal: you repay the same amount of principal each time plus the interest on the balance, so payments start higher and fall over time. You pay less interest in total.

    Frequently asked questions

    Does it include taxes, insurance and fees?

    No. A mortgage payment in the US often also includes property tax, homeowner's insurance and PMI (escrow). Add them to the monthly figure to see your full housing cost.

    How much do extra payments save?

    Any extra payment goes straight to principal, so it cuts all the future interest on that amount. Paying even a little more each month can shorten a 30-year mortgage by years.

    What is the effective annual rate?

    The real yearly cost of the loan once interest compounds monthly. A 6.5% nominal rate paid monthly is an effective 6.70% per year (before fees).

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