Loan Payment Calculator
An amortizing loan keeps the payment fixed while the split between interest and principal changes every month. The formula that produces that payment — and the amortization behind it — explains why shortening the term saves so much.
Monthly payment
$1,896.20
- Total of all payments
- $682,633.47
- Total interest
- $382,633.47
Values update as you type. This calculator covers the single scenario its formula assumes — see Common Mistakes for what it leaves out.
The formula this calculator uses
M = P x r(1 + r)^n / ((1 + r)^n - 1)
- M
- Fixed payment per period
- P
- Loan principal — the amount borrowed
- r
- Interest rate per period as a decimal (annual rate / 12)
- n
- Total number of payments
How to check the result by hand
- 1
Determine the amount actually financed
Start from the price, subtract the down payment, and add any fees being rolled into the loan. Financing $300,000 on a $375,000 home means P = 300,000, not 375,000.
- 2
Convert the annual rate to a periodic rate
Divide by 12 for monthly payments: 6.5% becomes 0.065 / 12 = 0.0054167. Using the annual rate here would charge twelve years of interest in one month.
- 3
Count the total number of payments
Years times twelve for a monthly schedule. Thirty years gives n = 360, fifteen years gives n = 180. Biweekly and weekly schedules use different counts and a correspondingly different rate.
- 4
Evaluate the payment factor
Compute (1 + r)^n first. For r = 0.0054167 and n = 360 that is about 6.991798. The rest is substitution into the fraction.
- 5
Solve for M and check it against total cost
M = $300,000 x 0.0054167 x 6.991798 / (6.991798 - 1) = $1,896.20. Multiply by 360 to get total paid, then subtract principal for total interest — the number that actually tells you what the loan costs.
For worked examples, common mistakes and the limits of this formula, read the full How To Calculate Loan Payment page.