Loan Payment Calculator

Calculate monthly payments, see amortization schedule, and find how extra payments save you money.

Amortization Summary

Frequently Asked Questions

• How is a monthly loan payment calculated?+

  The standard formula is M = P × [r(1+r)^n] / [(1+r)^n - 1], where M is the monthly payment, P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments.

• What is an amortization schedule?+

  An amortization schedule shows each monthly payment broken down into principal and interest. In the early years, most of your payment goes toward interest. Over time, a larger portion goes toward principal as the balance decreases.

• How much can I save by making extra payments?+

  Even small extra payments can save thousands. On a $300,000 mortgage at 6.5%, paying an extra $200 per month saves over $80,000 in interest and pays off the loan about 6 years early.

• What's the difference between a 15-year and 30-year mortgage?+

  A 15-year mortgage has higher monthly payments but much lower total interest. For example, a $300K loan at 6.5% costs about $382K in interest over 30 years, but only about $165K over 15 years — saving over $217K.

• What factors affect my monthly payment?+

  Three factors determine your payment: the loan amount (principal), the interest rate, and the loan term. A larger loan, higher rate, or shorter term all increase your monthly payment.

• Should I choose a longer loan term for lower payments?+

  A longer term reduces monthly payments but significantly increases total interest paid. Choose the shortest term you can comfortably afford. You can also choose a longer term but make extra payments when possible.

• What is the interest-to-loan ratio?+

  It's the total interest paid divided by the original loan amount, expressed as a percentage. A 30-year mortgage at 6.5% has a ratio over 125%, meaning you pay more in interest than the original loan amount.

• How much house can I afford?+

  Use the affordability calculator to find out. Financial advisors typically recommend keeping your housing costs (mortgage + taxes + insurance) below 28% of your gross monthly income.