Calculate your monthly payments, total loan cost, and borrowing capacity. Two modes: loan calculator and reverse capacity estimator.
Loan amortization is the process of spreading out a loan into a series of fixed payments over time. In the early years, most of your payment goes toward interest. As the principal shrinks, more of each payment goes toward paying off the loan. This calculator shows exactly how that split works for any loan scenario.
The monthly payment is calculated using the annuity formula: PMT = P x [r(1+r)^n] / [(1+r)^n - 1], where P is the loan principal, r is the monthly interest rate, and n is the total number of payments. For a $300,000 mortgage at 6.5% over 30 years, the monthly payment is $1,896. Over the life of the loan, you would pay $382,615 in interest, more than the original loan amount.
Making extra payments is one of the most effective ways to reduce total interest cost. Adding just $100/month to a $300,000 mortgage at 6.5% can save over $50,000 in interest and cut 4 years off the loan term. This calculator lets you model the impact of additional monthly or one-time payments.
According to the Federal Reserve, the average US household carries $59,800 in mortgage debt, $5,700 in auto loans, and $6,500 in credit card balances. Understanding the true cost of borrowing across all your debts is essential for making informed financial decisions.
Related tools: Rent vs Buy Calculator, Property ROI Calculator, Compound Interest Calculator