- Most loans (mortgage and other) in the United States compound interest monthly.
- Mortgage loans in Canada compound interest semi-annually.
|I've seen several loan calculators that include other fees (taxes, insurance, PMI, HOA, etc...) in the calculation. I have intentionally left them out because they are subject to change often. Therefore, you'll need to adjust your payment accordingly.|
- 30 years = 360 months
- 25 years = 300 months
- 20 years = 240 months
- 15 years = 180 months
- 10 years = 120 months
- 5 years = 60 months
- 3 years = 36 months
- If you want to calculate how much a mortgage payment will be on a $200,000 mortgage at 5.00% interest for 360 months, you would enter:
- 200,000 for the Loan Amount
- 360 for Months
- 5 for Interest Rate (Compounded Monthly)
- Press the Payment button, and you'll see that your payment would be $1,073.64.
Note: If you look down the amortization schedule, you'll see the final payment is $1,076.47. Some lenders don't like the final payment to be greater than the regular payment so they'll add a penny to the regular payment. You can do that on this calculator simply by adding a penny to the payment and solving for "Months". The # of months won't change much, if at all. Now you can view the schedule again to see the difference it makes. In this case, you'll make 359 full payments of $1,073.65 and a final payment of $1,068.30.
- Using the example above, let's say you can make a higher monthly payment. You would like to round your payment up to $1,200/month. How long will it take to pay off your mortgage?
- Leave everything the same, just enter 1200 for Payment and press Months.
- It will take only 286 months to pay off your mortgage! (285 full payments of $1,200 and a final partial payment of $170.76.
- So, paying that extra $126.36/month will save you a little more than 6 years of payments, and about $44,342 interest!
- Suppose you want to buy a car, but you don't want to spend more than $250/month for payments. You can get a 4 year car loan at 3.9%. How much of a car can you buy? You would enter:
- 48 for Months
- 3.9 for Interest Rate (compounded Monthly)
- 250 for Monthly Payment
- Press the Principal button, and you will see that you could buy a $11,094.18 car with no down payment -or put more money down on a more expensive car.
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