Understanding the true cost of a loan or mortgage is the first step toward smart financial planning. Our free and easy Simple Loan & Mortgage Calculator not only shows you your estimated monthly payment but also provides a full amortization schedule, so you can see exactly where your money is going over the life of the loan.

How to Use Our Loan & Mortgage Calculator

Understanding your loan details is easy. Just follow these steps:

1. Enter the total Loan Amount you are borrowing.
2. Enter the Annual Interest Rate for the loan.
3. Enter the Loan Term in years (e.g., 30 for a typical mortgage, 5 for a car loan).
4. The calculator will instantly update with your estimated Monthly Payment, a visual breakdown of principal vs. interest, and a full year-by-year amortization schedule.

Example: A 30-Year Mortgage

Let's calculate the payment for a $350,000 mortgage with a 30-year term at a 6.5% interest rate.

The calculator would show:

• Monthly Payment: $2,212.33
• Total Principal Paid: $350,000.00
• Total Interest Paid: $446,438.36

The amortization schedule would then show you how, in the early years, most of your payment goes toward interest, while in the later years, it primarily goes toward paying down the principal balance.

Understanding Amortization: Where Does Your Money Go?

A loan payment isn't just one number; it's made up of two key parts: principal and interest.

• Principal: This is the amount of money you actually borrowed. A portion of each payment goes toward reducing this balance.
• Interest: This is the "cost" of borrowing the money, paid to the lender.

Amortization is the process of paying off a debt over time in regular installments. At the beginning of a loan, the outstanding balance (principal) is at its highest, so the interest portion of your payment is also at its highest. As you pay down the principal over the years, the amount of interest you owe each month decreases. This means a larger portion of your fixed monthly payment can go toward the principal.

An amortization schedule, like the one our tool generates, is a table that details each periodic payment on a loan, showing exactly how much of each payment is applied to interest and how much to principal. It gives you a clear picture of how your loan balance decreases over time and the total amount of interest you will pay.

Frequently Asked Questions (FAQ)

Q1: Does this calculator include taxes and insurance (PITI)?

No. This is a simple principal and interest (P&I) calculator. For mortgages, your actual monthly payment will be higher because it will also include property taxes, homeowners' insurance, and potentially private mortgage insurance (PMI). This tool is designed to calculate the loan component of that payment accurately.

Q2: Can I use this for car loans or personal loans?

Yes, absolutely. The math for an amortized loan is the same regardless of its purpose. Simply enter the correct loan amount, interest rate, and term for your car loan or personal loan to get an accurate monthly payment estimate.

Q3: How can I pay less interest over the life of the loan?

There are two primary ways to reduce the total interest paid. First, a shorter loan term (e.g., a 15-year mortgage instead of a 30-year) will have you paying interest for fewer years. Second, making extra payments that are applied directly to the principal will reduce the balance faster, which in turn reduces the amount of future interest that can accrue.