Most mortgages, car loans and personal loans are amortizing: every payment is the same, but the share going to interest shrinks over time while the share repaying the balance grows. This calculator uses the standard annuity formula that lenders use to set that fixed payment.
How to use it
- Enter the amount you will borrow after any down payment.
- Enter the annual interest rate quoted by the lender (the nominal rate, not the APR with fees).
- Choose the term in years or months.
To find what you can afford, type your budget directly into the Monthly payment field and the loan amount updates automatically.
What the result does not include
Property tax, insurance, private mortgage insurance and lender fees are not part of the principal-and-interest payment. Add them separately to estimate your real monthly cost. Variable-rate loans will change once the rate resets.
Ways to pay less interest
A shorter term, a lower rate or extra payments toward principal all cut total interest. Compare the Total interest figure for a 15-year and a 30-year term to see the trade-off between a lower payment and a lower lifetime cost.
Inputs explained
| Field | What to enter |
|---|---|
| Loan amount | Amount in your currency. The amount you borrow, after any down payment. |
| Annual interest rate | In % |
| Loan term | Units: years, months |
What each result means
- Monthly payment = pmt([Annual interest rate]÷1200, [Loan term], [Loan amount])
- Total of all payments = [Monthly payment] × [Loan term]
- Total interest = [Total of all payments] – [Loan amount]
Example values
How the main result changes when Loan amount changes and everything else stays at the example values above:
| Loan amount | Monthly payment |
|---|---|
| 125,000 | 790.09 |
| 187,500 | 1,185.13 |
| 250,000 | 1,580.17 |
| 312,500 | 1,975.21 |
| 375,000 | 2,370.26 |
| 500,000 | 3,160.34 |
Formula
M = P × r ÷ (1 − (1 + r)^−n)r = annual rate ÷ 12, n = number of monthly paymentsWorked example
Borrow 250,000 at 6.5% for 30 years.
Monthly rate r = 0.065 ÷ 12 = 0.0054167; number of payments n = 360.
M = 250,000 × 0.0054167 ÷ (1 − 1.0054167^−360) ≈ 1,580.17 per month.
Total repaid = 1,580.17 × 360 ≈ 568,861; total interest ≈ 318,861.
Key terms
- Principal
- The amount borrowed, on which interest is charged.
- Amortization
- Repaying a loan through equal periodic payments that cover interest and part of the principal.
- Nominal annual rate
- The yearly interest rate before compounding and fees; divided by 12 for monthly loans.
- APR
- Annual percentage rate including certain fees, useful for comparing lenders.
Frequently asked questions
Is the monthly payment the same for the whole loan?
For a fixed-rate amortizing loan, yes. Only the split between interest and principal changes each month.
Why is total interest so high on a 30-year loan?
Interest is charged on the outstanding balance, which stays high for longer when the term is long, so more interest accumulates.
Does a 0% loan work in this calculator?
Yes. At 0% the payment is simply the loan amount divided by the number of months.
Can I calculate how much I can borrow?
Type the monthly payment you can afford into the result box and the loan amount is solved automatically.
What formula does the Loan Payment Calculator use?
M = P × r ÷ (1 − (1 + r)^−n).
Can I work backwards from the result?
Yes. Type the result you want into Monthly payment and the calculator finds the matching loan amount.