Loan Calculator uses the textbook amortising-loan formula, M = P · r · (1+r)^n / ((1+r)^n − 1), where P is the principal, r is the periodic interest rate (annual ÷ 12) and n is the term in months. The same formula sits behind every fixed-rate mortgage and personal loan in the US, UK and EU. The zero-interest edge case is handled separately so the result remains P / n rather than dividing by zero.
Three numbers are returned: the monthly payment, the total interest paid over the life of the loan, and the total cost (principal + interest). These are P&I figures — they exclude property tax, hazard insurance, PMI and origination fees, which can add 20–30% to a real mortgage payment. Use the result as a sanity check against a lender quote rather than as a substitute for one.
The standard amortising-loan formula: M = P · r · (1+r)^n / ((1+r)^n − 1), where P is principal, r is the monthly interest rate (annual ÷ 12), and n is the term in months. With r = 0 it falls back to M = P / n.
Not always. APR (in the US/UK) bundles certain fees into the rate; the nominal annual interest rate (sometimes called 'note rate') is what this calculator expects. If your lender quotes APR only, the monthly payment will be slightly overstated.
No. The calculator returns principal + interest only. Real mortgage payments often include property tax, hazard insurance, PMI and origination fees — these are excluded. Treat the result as P&I, not PITI.
Because interest accrues on the remaining principal every month. An extra payment at month 1 reduces the principal that earns interest for all remaining months — early prepayment is far more powerful than late prepayment for the same dollar amount.
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⚠ Disclaimer: This calculator is for informational and educational purposes only. Results are estimates and should not be relied upon as financial, medical, or professional advice. Always consult a qualified professional before making financial or health decisions.