How to Calculate Loan and Mortgage Payments

A loan offer shows a monthly payment, but that number tells only part of the story. How much total interest will you pay over the life of the loan? How much can you save by making extra payments? How does a 15-year mortgage compare to a 30-year? A loan calculator answers all these questions.

How the calculator works

The ToolStand Loan and Mortgage Calculator uses the PMT formula to calculate monthly payments from principal, interest rate, and loan term. It generates a full amortization schedule showing each monthly payment broken into principal and interest. Over the life of a 30-year $300,000 mortgage at 6.5 percent, you will pay over $380,000 in interest alone — the schedule makes this painfully clear.

Early payoff simulation

The calculator lets you add extra monthly payments and shows how much interest you save and how many years you cut off the loan. Adding $200 per month to that $300,000 mortgage saves over $90,000 in interest and pays off the loan 7 years early. The amortization schedule recalculates instantly to show the new payoff date and remaining balance after each extra payment.

Paired with other financial tools

Before taking a loan, use the Compound Interest Calculator to understand opportunity cost — money spent on interest could have been invested. Use the Savings Calculator to model saving for a larger down payment instead of borrowing more. Use the Inflation Calculator to understand that fixed-rate mortgage payments become effectively cheaper over time as inflation erodes the value of each dollar.

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