Loan Parameters
Calculation Results
Equal Payment vs Equal Principal
Visualizations
Amortization Schedule
| Period | Payment ($) | Principal ($) | Interest ($) | Balance ($) |
|---|
View Calculation Formula
Equal Payment: Monthly M = P·r·(1+r)n / ((1+r)n − 1), r = annual rate/12, n = term×12; total interest = M·n − P.
Equal Principal: Month k = P/n + (P − (k−1)·P/n)·r; total interest = (n+1)·P·r/2.
Monthly payment with taxes and insurance = M + (property tax + insurance) / 12.
Extra payment reduces principal each month, shortening the term.
Amounts use integer cents internally to avoid floating-point errors.
📚 Mortgage Knowledge
Equal Payment vs Equal Principal
Two common repayment methods: Equal Payment (annuity) keeps monthly payments the same, with early payments mostly interest and later ones mostly principal. Equal Principal pays the same principal each month plus declining interest, so total interest is lower but early payments are higher. For a $300,000 loan at 4% over 30 years, equal payment totals ~$215,609 in interest; equal principal totals ~$180,500 — about $35,000 less. Choose equal principal only if you can afford the higher early payments.
The Impact of Extra Payments
Even small extra payments toward principal can dramatically shorten your loan term. Paying an extra $200/month on that same $300,000 / 4% / 30-year loan saves ~$46,000 in interest and pays off about 5 years early. The earlier in the loan term you make extra payments, the bigger the savings, because interest is calculated on the outstanding principal. Always confirm with your lender that extra payments go toward principal, not escrow or future payments.
Fixed vs Adjustable Rates
Fixed-rate mortgages lock in an interest rate for the entire term (15 or 30 years), offering predictable payments. Adjustable-rate mortgages (ARMs) start with a low teaser rate for 3–10 years, then adjust annually based on market indexes. ARMs are risky if rates rise sharply, but can save money if you plan to sell or refinance before the adjustment period. In a rising-rate environment, fixed rates are generally safer for long-term homeownership.