The loan payment calculator turns an amount, interest rate and term into the monthly payment — and shows the number lenders don’t lead with: the total interest over the life of the loan.
The formula
Payment = L × i ÷ (1 − (1 + i)^−n) — the standard amortising loan formula, where L is the loan amount, i the monthly rate (annual ÷ 12), and n the number of monthly payments. Early payments are mostly interest; the principal share grows every month.
Worked example
$250,000 at 6.5% over 20 years: monthly payment ≈ $1,864, total paid ≈ $447,000, total interest ≈ $197,000 — nearly 80% of the original loan again. Stretch to 30 years and the payment drops to ~$1,580, but total interest jumps past $318,000. Lower payment, much more expensive loan.
How to read the result
The term is the lever people underestimate: shorter terms cost more per month and far less in total. Rate matters compound-fold too — on the 20-year example, one extra percentage point adds roughly $36,000 of interest. Before committing, sanity-check the payment against income (housing lenders look for payments under ~28-33% of gross income), and compare the loan’s cost against the return the money could earn via the ROI calculator.
Does this include taxes and insurance?
No — it computes principal and interest only. Mortgage escrow items like property tax and insurance come on top of this payment.
Why is early repayment mostly interest?
Interest accrues on the outstanding balance, which is largest at the start. As the balance falls, more of each fixed payment goes to principal.
Is a shorter term always better?
It minimises total interest, but only if the higher payment is comfortably affordable. A payment that breaks your budget in a bad month is worse than extra interest.
How much does an extra payment help?
A lot — extra principal payments early in the term skip the highest-interest months. Even one extra payment a year can cut years off a long loan.