Milo Quell

Free Tool

Loan & Mortgage Calculator

See the monthly payment on any loan or mortgage — and, just as important, the total interest you'll pay over its lifetime.

$
%
yrs

Monthly payment

$2,022.62

Total interest

$408,142

Total paid

$728,142

Over the full term, 56% of everything you pay is interest — not the thing you borrowed for. A shorter term or extra payments cut that sharply.

The number the monthly payment hides

Loans are sold on the monthly payment, because a manageable monthly number makes almost any purchase feel affordable. But the figure that actually matters is the total interest — what the loan costs you on top of what you borrowed. On a 30-year mortgage, that can approach the size of the loan itself.

The lever most people don't use is the term. Shortening it raises the monthly payment but slashes total interest, because the balance is outstanding for fewer years. Extra payments do the same thing — every dollar above the minimum goes straight to principal and compounds in your favour for the rest of the loan.

Frequently asked

How is a monthly loan payment calculated?

A fixed-rate loan uses an amortization formula: the monthly payment is the loan amount times the monthly rate, divided by one minus (one plus the monthly rate) to the power of minus the number of payments. In plain terms, it spreads the loan plus interest evenly across every month so the balance reaches exactly zero at the end.

How much interest will I pay over the life of a loan?

Total interest is the sum of every payment minus the amount you borrowed. On a long mortgage, this can rival or exceed the original loan — which is why the calculator shows what share of your total payments is interest rather than principal.

Does a shorter loan term save money?

Yes, substantially. A shorter term has higher monthly payments but far less total interest, because the balance is outstanding for less time. Even a small extra payment each month shortens the term and cuts the total interest, since it goes straight to the principal.

What is the difference between interest rate and APR?

The interest rate is the cost of borrowing the principal. APR (annual percentage rate) folds in certain fees, so it reflects the true yearly cost more completely. For a rough monthly payment, either works; for comparing loan offers, compare APRs.

Keep reading

Why owning a home has drifted out of reach for so many — the forces behind the numbers.

Why owning a home is becoming an impossible dream →
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