What to enter
This calculator is deliberately narrow. It answers one question, what principal and interest will a loan of a given size cost each month, and then shows how that answer moves when you change the term or the rate. Taxes, insurance and mortgage insurance are left out so the loan itself is easy to compare. For the complete monthly picture, use the mortgage calculator.
- Loan amount
- The amount you borrow: the purchase price minus your down payment, or the balance you would refinance. If closing costs are rolled into the loan, include them.
- Interest rate (APR)
- Enter the annual rate on your quote. Rate quotes change daily and depend on credit, down payment, loan type and points, so compare several lenders on the same day.
- Loan term
- Choose from 10 to 30 years. The selected term drives the main result; the comparison table shows all of them.
- Extra principal payment
- Optional. A fixed amount added to every payment. It does not change the required payment, only how fast the balance falls.
How to read your results
The headline number is the required monthly payment for principal and interest. Beneath it, total interest is what you would pay the lender over the life of the loan if you never paid extra, and interest as a share of the amount borrowed turns that into a ratio that is easy to compare across loans. On the default loan below, 30 years at 6.75% costs 133% of the amount borrowed in interest, so the interest bill is larger than the loan itself.
The two comparison tables are the most useful part when you are shopping. The term table shows the payment, total interest and total paid for 10, 15, 20, 25 and 30 years on your loan amount at your rate. The rate table holds the term constant and moves the rate up and down by half-point steps, showing the change in the monthly payment against your rate. Use it to judge whether a quote with discount points is worth the cost or how much a rate lock is worth.
The formula
Payments on a fixed-rate mortgage are level, and each one pays that month’s interest first and reduces principal with the rest. The level payment that pays off the balance exactly is:
Total interest is the sum of all payments minus the amount borrowed. With an extra payment, the schedule is recalculated month by month: interest is charged on the current balance, the required payment plus the extra amount is applied, and the loop ends when the balance reaches zero, which is why the loan finishes early.
Worked example
$320,000 at 6.75% over 30 years
With r = 0.0675 ÷ 12 = 0.005625 and n = 360, the payment is $2,075.51 a month. Total payments come to $747,185, so the interest cost is $427,185.
Choosing 15 years instead raises the payment to $2,831.71 but cuts interest to $189,708. Choosing 30 years at a rate one point higher (7.75%) raises the payment by $217.01, and one point lower (5.75%) reduces it by $208.08.
Adding a fixed $250 every month pays the loan off in 22 years 2 months and lowers total interest to $296,623.
How rate and term move the payment
A useful rule of thumb comes straight from the formula: at 6.75% over 30 years, every $100,000 borrowed costs about $648.60 a month in principal and interest. At 5.75% the same $100,000 costs about $583.57. Scale it to your own loan amount by multiplying, so $320,000 is 3.2 times that figure.
Rates matter more than most buyers expect. On the example loan, a one-point higher rate adds about $217 to the monthly payment and about $78,122 to the total interest over 30 years, and a one-point lower rate saves about $208 a month and $74,909 in interest.
Term changes work differently. Moving from 30 to 15 years at the same rate raises the payment from $2,075.51 to $2,831.71, about 36% more, while it cuts total interest from $427,185 to $189,708. The first years of a long loan are mostly interest, so the extra payment buys a great deal of principal reduction. Terms in between, such as 20 or 25 years, often cost a modest amount more each month than 30 years and remove many thousands of dollars in interest. The term table on this page makes the trade-off concrete for your own numbers.
Compare quotes using the same loan amount, term, rate lock period and credit assumptions, and ask for the Loan Estimate, which is standardized. Look at the APR as well as the rate, since APR includes certain fees, but do not treat a lower APR as proof of a better deal without comparing the closing costs and the time you plan to keep the loan.
Assumptions and limits
The calculation assumes a fixed rate, level monthly payments and no fees. Adjustable-rate loans, interest-only periods, balloon payments and biweekly servicing are different products that this page does not model. Payments are shown in dollars and cents but a servicer may round a cent differently, so expect your actual payment to differ by a few cents at most. Property taxes, insurance and PMI are excluded on purpose. If you need them, the full mortgage calculator adds them, and the loan calculator handles non-mortgage loans with origination fees.
Frequently asked questions
Does this payment include taxes and insurance?
No. It is principal and interest only. Property tax, homeowners insurance, HOA dues and mortgage insurance are added on the mortgage calculator.
What is the difference between the interest rate and APR?
The interest rate determines your monthly interest charge. The APR is a broader yearly cost measure that also folds in certain lender fees, so it is usually a little higher than the rate. Enter the interest rate for the payment calculation, and use APR when comparing the overall cost of offers.
How can I lower my monthly payment?
The levers are a larger down payment or smaller loan, a lower rate (by shopping lenders, improving credit or buying points), and a longer term. Each has a cost: a longer term increases total interest, and points cost cash up front.
Why does an extra payment save so much?
Because interest is calculated on the remaining balance, a dollar of principal repaid now removes the interest that dollar would have generated in every later month. The effect compounds over long terms.
What happens at a 0% rate?
The payment is the loan amount divided by the number of months, and there is no interest. The formula handles it as a special case to avoid dividing by zero.
Sources and further reading
- CFPB: Owning a Home Loan Estimate and Closing Disclosure explainers.
- CFPB: What is the difference between a loan interest rate and the APR?
- CFPB: Loan Estimate explainer