Loan Calculator
Monthly payment, total interest, real cost.
How the monthly payment is computed
Fixed-rate loans use the amortization formula: M = P · r(1+r)ⁿ / ((1+r)ⁿ − 1), where P is principal, r the monthly rate (annual ÷ 12) and n the number of payments. Every payment is partly interest and partly principal — early on, interest dominates, which is why extra principal payments in the first years save disproportionate interest over the life of the loan.
The principal-vs-interest bar makes the long-term cost visible. On a 30-year mortgage at 6.5%, total interest approaches the amount borrowed — the rate you negotiate and the term you choose matter more than almost any other lever. Even 0.5% off the rate, or 5 years off the term, moves the total dramatically; compare scenarios here before signing anything.
FAQ
Does this include taxes, insurance or fees?
No — it models principal and interest only. Escrow items (property tax, insurance, PMI) add to the real monthly outlay; ask your lender for the full PITI figure.
What about extra monthly payments?
Adding X to every payment shortens the term rather than lowering the payment — the amortization re-computes against a shrinking balance. Model the savings by comparing total interest at the shorter effective term.