Loan Payment Calculator
Monthly payment, total interest and the full amortisation for any fixed-rate loan.
How it works
A fixed-rate loan payment comes from the annuity formula:
P = L x r / (1 - (1 + r)^-n)
where L is the amount borrowed, r the monthly rate (annual / 12) and n the number of months. Every payment is split between interest on the balance outstanding and repayment of the balance itself. Early on the split favours interest heavily; that reverses as the balance falls.
Any extra payment goes entirely against the balance, which is why even a small one has a disproportionate effect on total interest.
Common questions
Why does so little of my early payment reduce the balance?
Interest is charged on what you still owe, and at the start you still owe nearly everything. On a 30-year mortgage the first payment can be 80% interest. The proportion flips slowly, then quickly.
Is it worth paying extra?
Compare the loan rate against what the money would earn elsewhere, after tax. Paying off a 19% credit card is a guaranteed 19% return. Overpaying a 3% mortgage while holding 5% savings is a loss.