Mortgages
Compare lenders, terms and monthly costs. See exactly what 25 years vs 30 years means for your budget.
Amortization · Schedule · Private
Loan Calculator
Work out the monthly payment, total interest and full amortization schedule for any loan or mortgage.
Example:
Monthly payment
—
Enter a loan amount, rate and term to see your monthly payment.
The Loan Formula
The monthly payment formula
The monthly payment is calculated using the standard amortization formula:
M = P × r(1+r)ⁿ ÷ ((1+r)ⁿ − 1)
- M = monthly payment
- P = principal (loan amount)
- r = monthly interest rate (annual rate ÷ 12 ÷ 100)
- n = total number of monthly payments (years × 12)
Amortization
Each payment has two parts: interest and principal. The interest is calculated as remaining balance × monthly rate. Whatever is left after interest goes toward the principal. Early in the loan, most of the payment is interest. Over time, the balance falls, so less interest accrues each month and more goes to principal. That is why the balance drops slowly at first and faster later.
Total interest
The total interest is the difference between the total amount paid over the full term and the original principal. A £250,000 mortgage at 5.5% over 25 years costs roughly £208,000 in interest — nearly as much as the loan itself.
What this calculator does not include
- Fees — arrangement fees, broker fees, valuation fees
- Insurance — mortgage protection, life insurance, PPI
- Taxes — property taxes, stamp duty
- Early repayment charges — penalties for paying off early
- Variable rates — the calculator assumes a fixed rate
Interest rate vs APR
The interest rate is the cost of borrowing the principal. The APR (Annual Percentage Rate) includes fees and other charges, so it is always equal to or higher than the interest rate. When comparing loans, compare APRs — not interest rates.
Common Loans
| Loan | Amount | Rate | Term | Monthly |
|---|---|---|---|---|
| Mortgage | £250,000 | 5.5% | 25 yr | £1,535.22 |
| Mortgage | £300,000 | 6.0% | 30 yr | £1,798.65 |
| Car loan | £25,000 | 6.5% | 5 yr | £489.13 |
| Car loan | £18,000 | 5.0% | 3 yr | £539.50 |
| Personal loan | £10,000 | 9.0% | 3 yr | £318.00 |
| Student loan | £40,000 | 5.0% | 10 yr | £424.27 |
When You'll Need This
Car finance
Work out what you can afford before you walk into a dealership. Compare dealer finance to bank loans.
Personal loans
Consolidating debt, funding a wedding, or paying for home improvements — work out the true monthly cost.
Student loans
Understand how much you will repay over the standard 10-year term before you commit.
Refinancing
Compare a new offer to your existing loan. See how much you save by refinancing — or whether it is worth it.
Overpayment planning
See how much interest you would save by paying extra each month. Even small overpayments add up over decades.
Loan FAQ
How is a monthly loan payment calculated?
The monthly payment uses the amortization formula: M = P × r(1+r)ⁿ / ((1+r)ⁿ − 1), where P is the principal, r is the monthly interest rate, and n is the number of monthly payments.
What is amortization?
Amortization is the process of paying off a loan through regular payments. Early payments are mostly interest; later payments are mostly principal. The yearly schedule above shows exactly how the split changes.
Does this calculator include fees or insurance?
No. It only includes principal, interest and term. Arrangement fees, insurance, taxes and early repayment charges are not included.
Should I choose a shorter or longer term?
A shorter term means higher monthly payments but much less interest overall. A longer term lowers the monthly payment but costs more in total. Choose based on what you can comfortably afford — and remember that most lenders allow overpayments, which is often better than choosing a shorter term upfront.
What is the difference between interest rate and APR?
The interest rate is the cost of borrowing the principal only. APR includes fees and other charges, so it is always equal to or higher than the interest rate. When comparing loans, use the APR.
Does this calculator handle variable rates?
No. It assumes a fixed rate for the whole term. For variable rate loans, use the current rate as a starting point and adjust as the rate changes.
How much does overpaying save?
Every extra payment goes straight off the principal, which reduces the interest charged in every following month. On a £250,000 mortgage at 5.5% over 25 years, an extra £100/month would save roughly £35,000 in interest and pay off the loan about 4 years early. Use the calculator twice — once with the extra added to the payment — to compare.
Is my loan amount stored anywhere?
No. Everything runs in your browser. Nothing is uploaded, logged or shared.
You Might Also Need
Last updated: .