What this calculator does
A fixed-rate amortised loan is repaid in equal instalments, but each instalment is split differently over time. Early on, most of what you pay is interest on a large outstanding balance; by the end, almost all of it is principal. This calculator gives you the instalment, the total interest across the life of the loan, and a year-by-year breakdown of that shifting split.
It also handles extra repayments. Anything you add on top of the scheduled instalment goes entirely against principal, which cuts the balance that future interest is charged on. That is why a modest extra payment can shorten a loan by years rather than months: the effect compounds.
The formula
The instalment is set so that the present value of all future payments exactly equals the amount borrowed. Rearranged for the payment, that gives the standard amortisation formula. The monthly rate i is the annual rate divided by twelve, and n is the number of monthly payments in the term.
| Term | Meaning |
|---|---|
| M | The repayment due each month: principal and interest combined. |
| P | The principal: the amount actually borrowed, after any deposit. |
| i | The monthly interest rate, equal to the annual rate ÷ 12 ÷ 100. |
| n | The total number of monthly payments: the term in years × 12. |
The inputs explained
| Field | What to enter |
|---|---|
| Loan amount ($) | The amount you are borrowing, not the purchase price. Subtract any deposit first. |
| Annual interest rate (%) | The advertised annual rate on the loan. Use the comparison or effective rate if you want fees included. |
| Term (years) | The loan term in years. Half years are accepted, so 4.5 gives a 54-month term. |
| Extra payment per month ($) | Anything you pay above the required instalment each month. Leave at zero for the standard schedule. |
When to use it
Comparing two loan offers
Lenders quote rates, but you repay dollars. Run each offer through with its own rate and term and compare the total interest line rather than the monthly figure: a longer term almost always looks cheaper monthly while costing far more overall.
Deciding whether to make extra repayments
Enter your loan as it stands, then add an amount in the extra payment field. The payoff time and total interest update immediately, which turns an abstract question, “is it worth putting $200 a month in?”, into two concrete numbers you can weigh against other uses for that money.
Checking a lender’s quoted repayment
If a quoted instalment does not match what this calculator returns, the difference is usually fees rolled into the balance, a different compounding frequency, or an introductory rate that reverts later. It is a useful prompt to ask what the quote actually assumes.
Budgeting before you borrow
Work backwards: try amounts until the monthly figure lands where your budget can carry it comfortably, including at a rate one or two points higher than today’s. That headroom is what makes a loan survivable if rates move.
Worked examples
Every figure in the tables below is produced by this page’s own calculator at build time, so the numbers and the tool always agree. Select any row to load that scenario.
What are the payments on a $1,000,000 loan?
A million dollars borrowed over a 30-year term, with only the interest rate changing. The gap between the cheapest and dearest row is the clearest illustration of why a fraction of a percentage point matters so much on a large, long loan.
| Interest rate | Monthly payment | Total interest | Total repaid |
|---|---|---|---|
| 3% | $4,216.04 | $517,774.52 | $1,517,774.52 |
| 4% | $4,774.15 | $718,695.06 | $1,718,695.06 |
| 5% | $5,368.22 | $932,557.84 | $1,932,557.84 |
| 6% | $5,995.51 | $1,158,381.89 | $2,158,381.89 |
| 7% | $6,653.02 | $1,395,088.98 | $2,395,088.98 |
| 8% | $7,337.65 | $1,641,552.47 | $2,641,552.47 |
How the term changes a $500,000 loan at 6%
Same amount, same rate, different lengths. Stretching the term lowers the monthly commitment and raises the lifetime cost: the trade-off sits in these two columns.
| Term | Monthly payment | Total interest | Total repaid |
|---|---|---|---|
| 10 years | $5,551.03 | $166,123.01 | $666,123.01 |
| 15 years | $4,219.28 | $259,471.15 | $759,471.15 |
| 20 years | $3,582.16 | $359,717.27 | $859,717.27 |
| 25 years | $3,221.51 | $466,452.10 | $966,452.10 |
| 30 years | $2,997.75 | $579,190.95 | $1,079,190.95 |
| 35 years | $2,850.95 | $697,398.39 | $1,197,398.39 |
What extra repayments do to a $400,000 loan
Every dollar of the extra payment attacks principal directly, so the saving is far larger than the amount paid in.
| Extra per month | Total interest | Payoff time | Total repaid |
|---|---|---|---|
| $0 | $510,177.95 | 30.0 years (360 payments) | $910,177.95 |
| $100 | $446,260.70 | 26.8 years (322 payments) | $846,260.70 |
| $250 | $378,392.11 | 23.4 years (281 payments) | $778,392.11 |
| $500 | $304,620.81 | 19.4 years (233 payments) | $704,620.81 |
| $1,000 | $221,881.07 | 14.8 years (177 payments) | $621,881.07 |
Questions
Does this calculator include fees?
No. It works on the amount borrowed and the interest rate you enter. If your loan has an application fee, monthly account fee or mortgage insurance, add the up-front costs to the loan amount and treat recurring fees separately in your budget.
Why does the split between principal and interest change every month?
Interest is charged on the outstanding balance, and that balance shrinks with every payment. Since the instalment is constant, the shrinking interest portion leaves a growing principal portion. The amortisation table on the results panel shows this year by year.
Is this the same as a mortgage calculator?
The core arithmetic is identical. A mortgage calculator adds property-specific costs, rates, insurance and strata or HOA fees, on top of the principal and interest figure. Use the mortgage calculator if you want the full monthly housing cost.
What if my loan compounds fortnightly or weekly?
This calculator assumes monthly compounding and monthly payments, which covers most consumer and home loans. Paying fortnightly at half the monthly amount effectively makes 13 monthly payments a year, which you can approximate here by entering the extra as roughly one twelfth of the monthly payment.
Can I use it for interest-only loans?
Not directly. On an interest-only loan the payment is simply the balance multiplied by the monthly rate, with no principal reduction. Use the simple interest calculator for that period, then this one for the amortising period that follows.
For a housing loan with rates, insurance and strata included, use the mortgage repayment calculator. To work out the largest loan a given repayment can support, try how much can I borrow.