Loan calculator
Estimate the monthly payment, total interest, and total cost of a fixed-rate loan. Educational only — see the disclaimer below.
First year payment breakdown
| Month | Payment | Principal | Interest | Balance |
|---|
What this tool does
Type a loan amount, an annual interest rate, and a term in years. The calculator returns the fixed monthly payment, the total amount you'll pay over the life of the loan, and the total interest. It also shows the breakdown of principal versus interest for the first twelve payments.
The formula
For a fully amortizing fixed-rate loan, the monthly payment M is:
M = P × r × (1 + r)N / ((1 + r)N − 1)
Where P is the principal (loan amount), r is the monthly interest rate (annual rate ÷ 12), and N is the number of monthly payments (years × 12). The formula assumes interest is compounded monthly and payments are made at the end of each month — the convention in most US mortgages and personal loans.
Why interest is front-loaded
In the first month, you owe interest on the full balance. After the first payment, the balance is slightly lower, so the next month's interest is slightly less. As the loan progresses, an increasing share of each payment goes to principal and a decreasing share to interest. This is called amortization and it's why mortgages get easier to "pay down" over time, not earlier.
The first-year breakdown in the table above demonstrates this: in month 1, almost all of your payment is interest. By month 360 of a 30-year loan, almost all of it is principal.
What this calculator doesn't model
This is the simplest possible loan model. Real loans typically include:
- Fees — origination fees, application fees, closing costs.
- Insurance and taxes — for mortgages, property tax and homeowner insurance are often added to the monthly payment (PITI: principal, interest, taxes, insurance).
- Variable rates — ARMs (adjustable-rate mortgages) start with a fixed teaser rate that resets after a set period.
- Prepayment penalties — some loans charge a fee if you pay them off early.
- Compounding conventions — some loans (especially in Canada) compound semi-annually rather than monthly.
For any borrowing decision, read the lender's disclosures and consult a qualified financial professional. Use this calculator for quick estimates only.
How to shop for a loan with this calculator
The two levers that matter most are the interest rate and the term. Lower the rate by 1 percentage point on a $300,000 30-year mortgage and you save roughly $60,000 in interest over the life of the loan. Shorten the term from 30 to 15 years and you save roughly half the total interest, at the cost of a higher monthly payment. Experiment with the inputs to see the trade-offs.
Privacy
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