Loan Calculator Standard formulas
Mortgages, auto loans, personal loans — equal monthly or equal principal supported.
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⚠️ Real loans include additional costs (origination, points, mortgage insurance, recording fees, hazard insurance for mortgages, possible prepayment penalty). Use APR when comparing offers. This calculator uses the pure mathematical loan formula and ignores fees and insurance.
Repayment Method Comparison
| Method | Monthly | Total interest | Notes |
|---|---|---|---|
| Equal monthly (PMT) | Same every month ($1,520) | $247K | Predictable budgeting; higher total interest |
| Equal principal | $1,960 first → $1,003 last | $203K (−$44K) | Higher early load; lower total interest |
Example: $300,000 / 4.5% / 30 years. Equal-monthly uses the PMT formula; equal-principal uses constant principal each month.
Monthly Payment by Loan Amount (4.5% / 30 yr / equal monthly)
| Amount | Monthly | Total interest | Total repaid |
|---|---|---|---|
| $100,000 | $507 | $82,407 | $182,407 |
| $200,000 | $1,013 | $164,813 | $364,813 |
| $300,000 | $1,520 | $247,220 | $547,220 |
| $400,000 | $2,027 | $329,627 | $729,627 |
| $500,000 | $2,533 | $412,034 | $912,034 |
Monthly payment and total interest scale linearly with loan amount. Roughly $507/month and $82K total interest per $100K borrowed at 4.5% / 30 years.
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Term comparison ($300K / 4.5%)
| Term | Monthly | Total interest |
|---|---|---|
| 10 years | $3,109 | $73,098 |
| 15 years | $2,295 | $113,096 |
| 20 years | $1,898 | $155,508 |
| 25 years | $1,667 | $200,249 |
| 30 years | $1,520 | $247,220 |
| 35 years | $1,420 | $296,303 |
| 40 years | $1,349 | $347,370 |
Longer term lowers the monthly payment but raises total interest sharply. From 30 to 40 years saves $171/month but adds $100K in total interest.
Rate comparison ($300K / 30 years / equal monthly)
| Rate | Monthly | Total interest | Δ vs 4.5% |
|---|---|---|---|
| 3.0% | $1,265 | $155,332 | −$92K |
| 3.5% | $1,347 | $184,968 | −$62K |
| 4.0% | $1,432 | $215,609 | −$32K |
| 4.5% (baseline) | $1,520 | $247,220 | — |
| 5.0% | $1,610 | $279,767 | +$33K |
| 5.5% | $1,703 | $313,212 | +$66K |
| 6.0% | $1,799 | $347,515 | +$100K |
A 1 percentage-point rate change shifts total interest by $60K–$100K over 30 years. Even 0.1pp adds up to $6K–$10K — worth shopping rates carefully.
APR vs interest rate
Interest rateThe cost of borrowing principal as a percentage. Drives the monthly payment.
APRIncludes interest plus most upfront fees (origination, discount points, mortgage insurance) annualized. Always higher than the interest rate.
Use APR to compareTwo loans at "the same rate" can have different APRs because of fees. APR is the closer apples-to-apples comparison.
This calculatorUses the interest rate only — actual real-world cost will be higher once fees are included.
Common loan fees and add-ons
Origination / processingOften 0.5–1% of the principal, paid at closing.
Discount pointsEach "point" = 1% of the loan, paid upfront to lower the rate (typically by 0.25pp).
Appraisal & recording (mortgages)$300–$600 appraisal; $50–$200 recording; depends on jurisdiction.
Mortgage insurance (PMI)Required when down payment <20% on a conventional mortgage. Typically 0.5–1.5% of the loan annually.
Hazard / homeowners insuranceRequired by mortgage lenders. Typically $1,000–$3,000/year.
Prepayment penaltySome loans charge for paying off in the first 1–3 years. Federal law restricts these on most mortgages, but check the contract.
Fixed vs variable / ARM
FixedSame rate for the entire term. Predictable. Typically 0.3–0.5pp higher than initial variable rates.
Variable / ARMResets periodically (every 1, 5, 7, or 10 years) using a benchmark (SOFR + margin in the US). Benefits borrowers if rates fall.
Hybrid ARM (5/1, 7/1, 10/1)Fixed for the first 5/7/10 years, variable after. Common when borrowers expect to move or refinance.
Rate capsARMs typically have caps on per-adjustment increase (e.g., 2pp), per-year, and lifetime maximum. Read the disclosure.
Refi opportunityIf rates drop ≥ 0.75–1pp, refinancing can save tens of thousands over the remaining term.
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Frequently Asked Questions
Equal monthly payment vs equal principal — which is better?
Total interest is lower with equal principal. For a $300K, 4.5%, 30-year mortgage,
equal-monthly totals about $247K interest while equal-principal totals about $203K — a
roughly $44K difference. However, equal-principal has a higher first payment ($1,960 vs
$1,520), so it suits borrowers with stable cash flow.
How much difference does loan term make (20 vs 30 years)?
$300K at 4.5% (equal monthly): 30-year = $1,520/month, $247K total interest;
20-year = $1,898/month, $156K total interest. A 10-year shorter term raises the monthly
payment by about $378 but saves about $91K in total interest.
How much does a 1 percentage point rate difference matter?
On $300K / 30 years, going 4.5% → 5.5% raises the monthly payment $1,520 → $1,703 (+$183),
total interest $247K → $313K (+$66K). Over 30 years, a 1pp change equals roughly
$60K–$100K in lifetime interest.
What's the difference between APR and the interest rate?
The interest rate drives your monthly payment. APR includes interest plus most upfront
fees (origination, points, mortgage insurance) expressed as an annualized rate. Always use
APR when comparing loan offers. This calculator uses the interest rate only.
Are there fees this calculator doesn't capture?
Yes — origination / processing (typically 0.5–1%), discount points, appraisal, recording,
mortgage insurance (PMI when down payment < 20%), hazard insurance, and possible
prepayment penalty. Compare offers using APR for a closer apples-to-apples view.
Fixed vs variable rate — which should I pick?
Fixed-rate loans keep the same rate for the full term — predictable, typically 0.3–0.5pp
higher than starting variable rates. Variable / ARM loans reset periodically and benefit
borrowers if rates fall. Hybrid ARMs (5/1, 7/1) are common — fixed for an initial period,
variable after. Pick fixed if you plan to stay long-term and prefer payment certainty.
Formulas & References
Last reviewed: 2026-05-10
- Equal monthly payment (PMT) — P × r × (1+r)n / ((1+r)n−1) [equivalent to Excel's PMT function]
- Equal principal — Monthly principal = P/n, monthly interest = remaining balance × r
- P = loan amount, r = monthly rate (annual ÷ 12), n = total months
- APR & Truth in Lending (US) — consumerfinance.gov
⚠️ This calculator uses pure mathematical loan formulas. Real-world borrowing costs include APR fees, insurance, and possible prepayment penalties not reflected here.