Calculate your monthly mortgage or loan payment instantly. Enter your loan details below to see the full payment breakdown including total interest paid over the life of the loan.
How Monthly Loan Payments Are Calculated
Your monthly payment on a fixed-rate loan depends on three factors: the loan principal (amount borrowed minus down payment), the interest rate, and the loan term. This calculator uses the standard amortization formula that every bank and mortgage lender relies on.
Each monthly payment contains two parts: principal repayment and interest charges. In the early years, most of your payment goes toward interest. A $240,000 mortgage at 6.5% for 30 years has a $1,517 monthly payment, but in the first month, only $217 reduces your principal while $1,300 goes to interest.
How to Use This Calculator
Loan Amount – The total purchase price or loan amount before subtracting your down payment.
Annual Interest Rate – Your loan APR. Mortgage rates vary based on credit score, loan type, and market conditions. Check current rates from multiple lenders for the most accurate projection.
Loan Term – The length of the loan in years. Common mortgage terms are 15 and 30 years. Auto loans typically range from 3 to 7 years.
Down Payment – The upfront cash you put toward the purchase. For mortgages, 20% down eliminates private mortgage insurance (PMI), which can save $100-300 per month.
15-Year vs. 30-Year Mortgage
A 30-year mortgage has lower monthly payments but dramatically higher total interest. On a $240,000 loan at 6.5%, the 30-year option costs $1,517 per month with $306,108 in total interest. The 15-year alternative costs $2,091 per month but only $136,405 in total interest. Choosing the shorter term saves $169,703.
The trade-off is cash flow flexibility. The $574 monthly difference between a 15-year and 30-year payment could be invested elsewhere. If that money earns more than 6.5% annually, the 30-year mortgage with investing the difference may produce better total returns.
How Interest Rates Affect Your Payment
Even small rate differences matter enormously over a 30-year loan. On a $300,000 mortgage, the difference between 6.0% and 7.0% is $199 per month and $71,640 over the life of the loan. Shopping multiple lenders and improving your credit score before applying can save tens of thousands of dollars.
Additional Costs Not Included
This calculator shows principal and interest only. Your actual monthly housing payment typically includes property taxes (often 1-2% of home value annually), homeowners insurance ($1,000-3,000 per year), and potentially PMI if your down payment is less than 20%. These additions can increase your total monthly payment by $300-800 or more.