How to use it
- Enter the home price.
- Enter the down payment, either as a percent of the price or as an amount.
- Enter the annual interest rate and the term in years.
- Optionally add an extra monthly payment to see how much sooner you finish and how much interest you save.
- The table shows, for each year, how much principal and interest you paid and what is left.
How it works
Loan = price − down payment. The monthly payment is the standard level-payment formula, payment = loan × r ÷ (1 − (1 + r)^−n), where r is the annual rate ÷ 12 and n = years × 12. The rate is assumed fixed for the whole term, and payments are made at the end of each month.
An extra payment goes entirely to principal on top of the regular payment. The regular payment stays the same, so the loan ends earlier and the last payment is smaller. Total interest is compared with the same loan without extra payments.
Worked example
A 300,000 home with 20% down (60,000) leaves a 240,000 loan. At 6% for 30 years the monthly payment is 1,438.92. Over 360 payments you pay 518,011.65, of which 278,011.65 is interest; with the down payment the home costs 578,011.65 in total.
Add 200 a month and the loan is paid off in 22 years and 1 month, 7 years and 11 months sooner, saving 85,085.34 in interest.
Things to keep in mind
- Taxes, insurance and fees are not included; ask your lender for the full monthly cost.
- Lenders round payments to the cent, so their schedule can differ by a few cents.
- Check whether your loan allows extra payments without a penalty before you plan on them.
These are estimates to help you compare options, not financial advice.