How this calculator works
The calculator converts the quoted annual rate to a rate for each payment period, then finds the level payment that clears the loan. It assumes the rate stays unchanged throughout the amortization. Taxes, fees and insurance are excluded unless already included in the amount borrowed.
Formula
i = (1 + r/c)^(c/k) - 1; n = years × k; payment = P × i / (1 - (1 + i)^(-n)). At zero interest, payment = P/n. P is the amount borrowed, r the annual rate as a fraction, c the compounding periods per year and k the payments per year.
Worked example
Borrowing $480,000 at 5.25% over 25 years, with semi-annual compounding and monthly payments, gives $2,860.41 per payment. The unrounded calculation totals $858,121.95, including $378,121.95 in interest. Actual lender schedules may differ because payments are rounded to cents.
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Frequently asked questions
Does bi-weekly mean accelerated bi-weekly?
Here it means 26 equal payments a year calculated to repay the loan over the chosen amortization. Accelerated bi-weekly payments are a different schedule and are not included.
Which compounding option should I choose?
Use the compounding period stated in your agreement. Semi-annual is the starting assumption; monthly is also available. Payment frequency and compounding frequency are separate choices.
Will my rate stay the same for 25 years?
This estimate holds the rate constant so you can compare scenarios. A mortgage term is usually shorter than its amortization, and a renewal can change the rate and payment.