Loan & Mortgage Calculator
Optional monthly extra
A loan payment calculator determines your fixed monthly payment using the amortization formula. Each payment covers accrued interest first, with the remainder reducing the principal. Early payments are mostly interest; later payments are mostly principal.
Tip: To find the break-even point for paying points to lower your rate: divide the upfront cost by monthly savings. If 1 point ($2,000) saves $40/month, break-even is 50 months.
- 1Determine the principal P (amount borrowed)
- 2Convert annual rate to monthly: r = annual rate ÷ 12
- 3Set n = total number of monthly payments (years × 12)
- 4Apply: M = P × r(1+r)ⁿ / ((1+r)ⁿ − 1)
- 5Total interest paid = (M × n) − P
Extra payments save significantly
On a $200,000 30-year mortgage at 6.5%, adding just $100/month cuts 4 years off the loan and saves ~$42,000 in interest.
APR vs. interest rate
APR (Annual Percentage Rate) includes fees and closing costs in the effective rate. Always compare APR, not just the stated interest rate.
| Rate | 2 years | 3 years | 5 years | 10 years | 30 years |
|---|---|---|---|---|---|
| 3% | $43.06 | $29.08 | $17.97 | $9.66 | $4.22 |
| 4% | $43.42 | $29.52 | $18.42 | $10.12 | $4.77 |
| 5% | $43.87 | $29.97 | $18.87 | $10.61 | $5.37 |
| 6% | $44.32 | $30.42 | $19.33 | $11.10 | $6.00 |
| 7% | $44.77 | $30.88 | $19.80 | $11.61 | $6.65 |
| 8% | $45.23 | $31.34 | $20.28 | $12.13 | $7.34 |
Fun Fact
The word "mortgage" comes from Old French meaning "death pledge" — the pledge (debt) ends either when it is paid off or when the borrower dies.