Use this form to calculate the periodic repayment of borrowed principal and interest incurred for a given time period and interest rate. The assumption of this calculator is that the regular payments (consisting of principal and interest) are equal, and that the first installment is due one payment interval after the borrowing date. There may be one balloon payment which is assumed to occur one payment interval after the final regular payment. (Exempli gratia, a one-year loan repaid in monthly installments and a final balloon payment would consist of 11 regular payments and one balloon payment.) The balloon payment also consists of principal and interest parts.
If you request an amortization schedule be shown, you can see how the principal and interest vary from payment to payment. There may be small discrepancies between the amortization schedule and the summarized calculations above the schedule. In calculating the schedule, principal and interest parts are rounded to the nearest penny, while the summary calculations above the schedule come directly from the analytic equation for amortization that I derived. Your lending institution may use a different method of handling fractional pennies. The final payment (or balloon payment) of the amortization schedule is adjusted (up or down) so that the debt is liquidated entirely.
If you are buying real estate, be sure that the loan amount (principal) is sale price of the property less the down payment. For example, property with a sale price of $100,000 which you might buy with 10% down ($10,000) would require a loan of $90,000.
Nota Bene: The payment amount for this calculator will only include principal and interest. But it doesn't stop there if you are trying to determine what your monthly payment will be when buying real estate. In addition to P&I, other money may be collected regularly by the bank or mortgage company to meet future payments of property taxes, mortgage insurance, homeowner's insurance, or other fees. This escrow payment is added on top of the monthly P&I, and is usually independent of the terms of the loan. Depending on the bank, you may be assessed a one-time escrow management fee at closing.
See common questions and answers in the FAQ.
For the math inclined, I have written down my derivation of the amortization equation. There's also a document which shows how to calculate with a moratorium before the payment schedule begins, and how to calculate an earlier payoff value. If you're trying to figure out the original parameters of an amortization schedule, maybe the math on obtaining the payment and interest rate will be helpful to you. Instead, you may wish to return to my home page, or you may want to e-mail me (bret at met dot fsu dot edu) about this program.