Loan Calculator

Enter three numbers, the amount borrowed, the annual interest rate and the term in years, and the tool returns the fixed monthly payment, the total interest you will pay, and the total amount repaid over the life of the loan. Open the amortization schedule to see every single payment broken into its interest and principal parts, with the outstanding balance after each one.

The payment comes from the standard annuity formula, where the principal, the monthly rate (the annual rate divided by 12) and the number of monthly payments combine into the one payment amount that clears the balance to exactly zero on the final month. It is the same formula behind every mortgage quote, car finance agreement and personal loan schedule. Worked example: borrow 200,000 at 5.00% over 30 years and the monthly payment is 1,073.64, you repay about 386,512 in total, and 186,512 of that is interest. You pay back nearly twice what you borrowed.

The amortization schedule is where the real lesson is. Interest each month is charged on the balance still outstanding, so in month one of that 30-year loan, 833 of the 1,073.64 payment is interest and only 240 reduces the debt. The split shifts slowly: it takes until month 195, over 16 years in, before more than half of each payment goes to principal. This is why overpaying early is so much more effective than overpaying late, and why selling a house after five years leaves you with far less equity than five years of payments would suggest.

Term and rate pull in opposite directions. Stretching a loan makes each month cheaper but costs far more in total: the same 200,000 at 5% costs 1,581.59 a month over 15 years but only 84,686 in interest, against 1,073.64 a month and 186,512 in interest over 30 years. That is a third off the payment for more than double the interest. Shorten the term as far as the monthly payment is comfortable, not as far as the lender will allow.

What the calculator deliberately leaves out: arrangement and origination fees, broker commission, property taxes, buildings or mortgage insurance, and any early-repayment penalty. So the figure it produces is the loan payment, not the full monthly housing cost, and the rate you enter is the nominal rate rather than the APR or APRC, which folds compulsory fees into a single comparable number. When you compare two offers, compare their APRs; when you want to know what leaves your account each month for the loan itself, use this.

It also assumes a fixed rate for the whole term and a fully amortising loan. Variable and tracker rates, discounted introductory periods, adjustable-rate mortgages, interest-only periods and balloon payments all behave differently. For a fix-then-revert deal, the practical approach is to run the calculator twice: once at the fixed rate to see the payment you will actually make now, and once at the lender's standard variable rate to see what you would face if you did nothing when the fix ends.

The monthly figure is also a good affordability check. Lenders generally want the housing payment below about 28% of gross monthly income and total debt payments below about 36%, though these thresholds vary by country and product. Working backwards from a payment you are comfortable with to the principal it supports is often more useful than starting from the price of the thing you want to buy.

Everything is calculated in your browser with plain JavaScript, so the amount you are borrowing and the rate you have been offered are never uploaded, logged or stored. These figures are a mathematical projection, not financial advice; your lender's own illustration is the binding document.