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Loan Payment Calculator

$
Monthly Payment
$1,264.14
Typical starter home mortgage

Formula

M = P × [r(1+r)^n] / [(1+r)^n − 1]

The monthly payment is calculated using the amortization formula, where P is the loan principal, r is the monthly interest rate (annual rate / 12 / 100), and n is the total number of payments (years × 12).

How to use

  1. Enter the borrowed amount in the Loan Amount field.
  2. Type the Annual Rate (%) your lender charges.
  3. Set the loan length in the Years field.
  4. Read your monthly payment, total paid, and total interest.

Example

For a $200,000 loan at a 6.5% annual rate over 30 years, the monthly payment is about $1,264.14. Over 360 payments you pay roughly $455,090 total, including about $255,090 in interest.

Frequently Asked Questions

How is a monthly mortgage payment calculated?
Using the amortization formula: M = P[r(1+r)^n]/[(1+r)^n-1], where P is the loan amount, r is the monthly interest rate, and n is total number of monthly payments.
What is a good mortgage interest rate?
Rates vary by market conditions, credit score, and loan type. Generally, anything below the current national average is considered good. Check current rates with multiple lenders.
Should I choose a 15 or 30 year mortgage?
A 15-year mortgage has higher monthly payments but much less total interest. A 30-year has lower monthly payments but you pay more interest over time. Choose based on your monthly budget.
Does this include taxes and insurance?
No. This calculates principal and interest (P&I) only. Your actual monthly payment may include property taxes, homeowner's insurance, and PMI.
How does the loan term affect my monthly payment and total interest?
A longer term spreads the principal over more payments, which lowers each monthly bill but raises the total interest you pay over the life of the loan. For example, a $200,000 loan at 6.5% costs about $1,264 per month over 30 years versus about $1,742 over 15 years, yet the 15-year option saves well over $100,000 in interest. Shorter terms cost more each month but far less overall.
What is loan amortization?
Amortization is the process of paying off a loan with fixed payments that cover both interest and principal. Early payments go mostly toward interest, while later payments chip away more at the principal. This is why making extra payments early in the loan reduces total interest more than the same extra payments made near the end.

How a loan payment is calculated

A fixed-rate loan payment comes from the amortisation formula, which spreads the principal plus interest evenly across every month of the term. Each payment is split between interest (charged on the remaining balance) and principal (which pays the loan down). Early on, most of each payment is interest; near the end, most of it is principal.

Three inputs drive the result: the amount borrowed, the annual interest rate, and the term in years. Raising the rate or the amount increases the monthly payment; lengthening the term lowers the monthly payment but increases the total interest you pay over the life of the loan.

Why the total interest matters

The monthly figure is only half the story. A longer term feels cheaper month to month but can cost far more overall: a 30-year mortgage has a lower payment than a 15-year one, yet often doubles the total interest. This is why the calculator shows total paid and total interest alongside the monthly payment — the value pages below work through specific amount, rate, and term combinations so you can compare them directly.

Note this calculates principal and interest only. A real mortgage payment usually also includes property tax, homeowner’s insurance, and sometimes PMI, which can add a meaningful amount on top.

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