Loan Payment Calculator
Estimate monthly mortgage or loan payments, total interest, and amortization over time.
What is a Loan Payment?
Loan payments combine principal repayment and interest costs. With fixed-rate loans, the monthly payment stays constant while the interest portion declines and principal portion increases over time.
How Amortization Works
Each month, interest is calculated on the remaining balance. The payment first covers interest, and the rest reduces principal. Over time, the balance decreases and the interest portion shrinks.
Loan Payment Formula
Monthly Payment = P × r / (1 − (1 + r)^−n), where P is the principal, r is the monthly interest rate, and n is the number of monthly payments.
Planning Considerations
Interest rate, term length, and loan amount drive affordability. Small rate changes can impact total interest significantly. Consider extra payments and fees in real scenarios.
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Loan Payment FAQ
Does this calculator include taxes and insurance?
No. Results reflect principal and interest on a fixed-rate loan. Real mortgages often include property taxes, insurance, and other fees.
Can I model extra payments?
This version shows standard amortization. Extra payments reduce interest and shorten the term. Future versions may include flexible prepayments.
What payment frequency is used?
Monthly payments are assumed. The interest rate is converted to an equivalent monthly rate from the annual percentage rate (APR).
Is the monthly payment exact?
The formula matches typical bank amortization. Rounding and lender-specific rules can cause minor differences.