CalculateY
Quick Answer
A $250,000 loan at 6.5% for 30 years has an estimated monthly payment of approximately $1,580. Over the full term, estimated total interest paid is approximately $318,861.
Common Examples
| Input | Result |
|---|---|
| $200,000 at 6% for 30 years | Estimated $1,199/month, $231,677 total interest |
| $250,000 at 6.5% for 30 years | Estimated $1,580/month, $318,861 total interest |
| $150,000 at 5% for 15 years | Estimated $1,186/month, $63,538 total interest |
| $350,000 at 7% for 30 years | Estimated $2,329/month, $488,281 total interest |
| $100,000 at 4.5% for 20 years | Estimated $633/month, $51,840 total interest |
How It Works
This calculator uses the standard amortization formula to compute the fixed monthly payment:
M = P x [r(1 + r)^n] / [(1 + r)^n - 1]
Where:
- M = estimated monthly payment
- P = principal (the loan amount)
- r = monthly interest rate (annual rate divided by 12, expressed as a decimal)
- n = total number of monthly payments (loan term in years multiplied by 12)
Once the monthly payment is determined, each month’s payment is split between interest and principal:
- Interest portion = Remaining Balance x Monthly Rate
- Principal portion = Monthly Payment - Interest Portion
- New Balance = Previous Balance - Principal Portion
In the early months, a larger share of each payment goes to interest because the outstanding balance is at its highest. As the balance decreases over time, the interest portion shrinks and the principal portion grows. This gradual shift is the defining characteristic of an amortizing loan.
For a 0% interest rate, the monthly payment is simply the principal divided by the number of months, with all of each payment going to principal.
Worked Example
For a $250,000 loan at 6.5% annual interest over 30 years: the monthly rate r = 0.065 / 12 = 0.005417, and n = 360 payments. Plugging into the formula: M = 250,000 x [0.005417 x (1.005417)^360] / [(1.005417)^360 - 1] = 250,000 x [0.005417 x 6.9913] / [6.9913 - 1] = 250,000 x 0.03788 / 5.9913 ≈ $1,580.17 per month. In the first month, interest = $250,000 x 0.005417 = $1,354.17, and principal = $1,580.17 - $1,354.17 = $226.00, leaving a new balance of $249,774.00. By month 360, almost the entire payment goes to principal. The estimated total paid over 30 years is approximately $568,861, with approximately $318,861 going to interest.