Loan Payment Calculator
Estimate a fixed-rate monthly payment and total interest.
The payment is the wrong number to shop on
Almost every lender advertises a monthly payment, because it is the number that fits a household budget. It is also the number that is easiest to make look good: stretch a five-year loan to seven and the payment drops noticeably while the total interest climbs. If you compare two offers on the payment alone, the longer, more expensive loan usually wins the comparison.
The honest comparison uses two figures together — the monthly payment tells you whether you can carry the loan, and the total interest tells you what the loan actually costs. A quote that improves one while worsening the other has not been improved at all, it has been rearranged.
What the amortisation formula assumes
This calculator uses the standard fixed-rate amortisation formula: the payment is the constant amount that reduces the balance to exactly zero over the term, given a fixed periodic rate. Early payments are mostly interest because interest is charged on a large outstanding balance; late payments are mostly principal. That front-loading is why paying a loan off early saves less than people expect near the end of a term, and far more than they expect near the start.
Three assumptions are baked in: the rate never changes, no payment is missed, and no extra payment is made. A variable-rate loan breaks the first, and any of them will move the real total.
What is not included
The output covers principal and interest only. Real quotes add origination or arrangement fees, mandatory insurance, account charges, and — on secured lending — property taxes, valuation fees, and registration costs. These can add a meaningful percentage to the true cost and are the main reason two loans at the same headline rate are not the same loan. Look for the annualised cost figure your jurisdiction requires lenders to publish (APR, APRC, or the local equivalent), which folds most fees into a single comparable rate.
How to use it
- Enter the amount you actually plan to borrow, after any deposit or trade-in.
- Enter the annual interest rate as a percentage — not the monthly rate.
- Enter the term in years, then read the monthly payment and total interest together.
- Re-run with a shorter term to see what the convenience of a low payment is costing you.
Before you rely on this
Does this include fees, taxes, and insurance?
No. It models principal and interest only. Origination fees, mandatory insurance, and — for mortgages — property tax and valuation costs are quoted separately and will raise the real cost. Compare offers using the annualised cost figure your regulator requires (APR or equivalent), which includes most of them.
Why does a longer term cost so much more?
Interest accrues on the outstanding balance every period, so a longer term means more periods during which a large balance is still owed. Doubling a term does more than double the interest paid on most rates, even though the monthly payment falls.
Can I model overpayments here?
Not directly. A simple way to approximate it is to shorten the term until the payment matches what you can genuinely afford — the resulting total interest is close to what regular overpayments of that size would achieve.
My lender quoted a different payment. Why?
Common causes are a different compounding convention, fees rolled into the balance, an insurance premium added to the payment, or a rate that differs from the one advertised once your application was assessed. Ask for a written breakdown of principal, interest, and fees.
Disclaimer: These calculators produce planning estimates, not financial advice. Results exclude fees, taxes, insurance, and rate changes, and no output here constitutes an offer or a recommendation. Speak to a qualified, regulated adviser before making a financial commitment.