Loan & Mortgage Calculator

With the annuity formula: the payment is set so that the same amount every month clears both the capital and the interest by the end of the term. Because interest is charged on what you still owe, the split changes every month — early on, most of your payment is interest and very little touches the balance; late on, the reverse. That is why the schedule matters more than the monthly figure. A 200,000 loan over 25 years at 4.5 per cent costs about 1,112 a month, and roughly 750 of the first payment is interest.

Usually because of what is bundled into the APR. This calculator uses the nominal interest rate on the amount you borrow. A lender's quoted APR must also include arrangement fees, valuation costs, mandatory insurance and anything else that is a condition of the loan — so the same nominal rate produces a higher APR and a slightly higher real cost. Ask for both numbers. If a lender will only give you the monthly payment and not the rate and the fees, you cannot compare their offer with anyone else's, and that is generally the point.

A surprisingly large one, because every extra unit goes straight to the balance and stops accruing interest for the rest of the term. On a 25-year mortgage, an extra 100 a month typically removes two to three years and a substantial amount of interest — put your own numbers in and the tool shows both. Two things to check first: whether your agreement charges an early repayment penalty, and whether the overpayment is applied to the balance rather than held as a credit against future payments. Both are worth asking in writing.