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How to Use
- 1Enter principal, annual interest rate, and term in years.
- 2Optionally use presets (mortgage, car loan, or 0% financing) for quick scenarios.
- 3Review monthly payment, total interest, total paid, and the principal/interest share breakdown.
- 4Open the amortization section for year-by-year principal, interest, and balance.
About Loan/Mortgage Calculator
The Loan/Mortgage Calculator computes monthly payment, total interest, total repayment, and yearly amortization for fixed-rate loans. It uses the standard amortization formula used by banks and financial institutions, so the numbers you see here match what a lender would quote.
Enter the principal amount, annual interest rate, and loan term in years to see your monthly payment instantly. The principal vs. interest breakdown shows how much of each payment goes toward reducing your balance versus paying interest — critical information for understanding the true cost of borrowing.
The year-by-year amortization table reveals how your balance decreases over time. In the early years of a mortgage, most of your payment goes to interest. As the loan matures, more goes to principal. This insight helps you decide whether extra payments or refinancing would save you money.
Quick presets for common scenarios (30-year mortgage, 5-year car loan, 0% financing) let you compare options instantly. The 0% interest mode calculates even payment splits — useful for buy-now-pay-later plans and interest-free promotional financing.
Frequently Asked Questions
How is the monthly payment calculated?
Using the standard amortization formula: M = P[r(1+r)^n] / [(1+r)^n - 1], where P is principal, r is the monthly interest rate (annual rate ÷ 12), and n is total number of payments.
What is amortization and why does it matter?
Amortization is the process of paying off a loan through scheduled payments that cover both principal and interest. In early payments, most goes to interest; over time, more goes to principal. The amortization table shows exactly how your balance decreases year by year.
Does it handle variable interest rates?
This calculator assumes a fixed interest rate for the entire loan term. Variable rate loans (like adjustable-rate mortgages) require recalculation whenever the rate changes.
How much mortgage can I afford based on my income?
A common guideline is the 28/36 rule: your monthly mortgage payment should not exceed 28% of your gross monthly income, and total debt payments should not exceed 36%. Enter different principal amounts to find a payment that fits within 28% of your income.
What happens if I make extra principal payments?
Making extra payments directly reduces your outstanding principal, which shortens your loan term and reduces total interest paid. Use the calculator to compare scenarios: try entering a slightly higher monthly payment as the implied principal by adjusting the loan amount downward to model the effect.
How does a shorter loan term affect total interest?
Shorter terms mean higher monthly payments but dramatically lower total interest. For example, a $300,000 loan at 6.5% costs about $382,000 in interest over 30 years but only about $161,000 over 15 years — roughly $221,000 in savings. Use the calculator to compare both scenarios.
Can I calculate a 0% interest loan?
Yes. Enter 0 as the annual interest rate and the tool calculates an even payment split across the selected term — useful for buy-now-pay-later plans and interest-free promotional financing.