How it works
Uses the standard fixed-payment amortization (Price system): PMT = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P = principal, r = monthly rate, n = number of payments. The annual rate is converted to an equivalent monthly rate.
Loan calculator
Enter the loan amount, interest rate, and term to calculate the monthly payment and total cost.
Example
A $200,000 mortgage at 7% per year for 360 months: payment ≈ $1,331, total paid ≈ $479,000, interest ≈ $279,000.
When to use this calculator
Useful for estimating mortgage payments, personal loans, auto loans, and any fixed-payment credit. Compare different terms and rates to find the best deal before signing.
Frequently asked questions
How is the monthly payment calculated?
PMT = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the principal, r is the monthly rate, and n is the number of payments. This calculator handles the math automatically.
What is the difference between nominal and effective rate?
The nominal rate is the advertised figure (e.g., 12% per year). The effective rate accounts for compounding: monthly rate = (1 + 0.12)^(1/12) − 1 ≈ 0.949%.
How can I reduce the total interest paid?
The main strategies are: increase the down payment, choose a shorter term, or make extra principal payments when possible.
Does the result include fees and insurance?
No. The calculation covers principal and interest only. Real loans may include origination fees, insurance, and other costs — check the APR (Annual Percentage Rate) with your lender.
What is the difference between fixed and variable rate?
A fixed rate stays the same for the whole term. A variable rate changes with market conditions. This calculator assumes a fixed rate throughout the loan.
Can I use this for a mortgage?
Yes. Enter the loan amount (home price minus down payment), the lender's annual rate, and the term in months (e.g., 360 for 30 years). The result shows the principal and interest portion only.
How to use
- Enter the total loan or mortgage amount.
- Enter the interest rate and select whether it is monthly or annual.
- Set the term in months or years.
- The monthly payment, total paid, and interest appear automatically.