Enter the amount borrowed, the annual interest rate and the term to get your monthly payment, the total interest over the life of the loan, and a year-by-year breakdown of how the balance falls. Adding an extra monthly payment shows immediately how much interest and time it saves.
With the amortisation formula P = L x r / (1 - (1 + r)^-n), where L is the loan amount, r is the monthly interest rate (annual rate divided by 12) and n is the number of monthly payments. Every payment is the same size, but the split between interest and principal shifts towards principal over time.
Interest is charged on the outstanding balance, which is at its largest at the start. As the balance falls, the interest portion of each fixed payment shrinks and the principal portion grows. This is why overpaying early saves far more than overpaying late.
No. It calculates principal and interest only. A real mortgage payment often also includes property tax, homeowners insurance and sometimes mortgage insurance, which can add a substantial amount on top.