Payment, interest and principal
In a loan with a constant payment, each payment splits into interest and repayment of principal. Interest is calculated on what you still owe; that is why at the beginning you pay more interest and less principal, and over time the proportion reverses.
With the amount, the nominal annual interest rate and the term, Snipshed calculates the monthly payment, total paid, total interest and the month-by-month table, which you can copy or download as CSV.
Comparing terms
A longer term lowers the payment but almost always increases the total interest cost noticeably. Try the same amount over 15, 20 and 25 years and compare the total interest figure, not just the payment.
A lower rate or a shorter term change the result in different ways: calculate several scenarios and decide which one balances the payment you can afford with the cost you are willing to accept.
What it leaves out
The calculation is indicative. It does not include arrangement fees, tied insurance, valuation costs or the reviews of a variable rate. Each lender rounds in its own way, so the real payment can differ by a few cents.
To decide, ask for the official information sheet and compare the total cost it states. If you need to break out a tax or a percentage fee, the VAT calculator and the percentage calculator help separate those parts.
- Enter the amount, annual interest and term.
- Calculate and note the payment and total interest.
- Change the term and calculate again to compare.
- Download the table if you need to review it month by month.
Criteria for reviewing and delivering the result
Before signing anything, always compare the total cost and not only the payment. A lower payment can hide a much longer term and a higher final cost. Also try a scenario with a slightly higher rate: if small rate increases make the payment unaffordable, it is a sign that the loan is too tight for your budget. This tool helps you understand the numbers, but the decision must rely on the official offer.
Comparing 15 and 25 years for a 200,000 loan
Enter amount 200000, interest 3.5 and a 25-year term and calculate. Note the payment and total interest. Change the term to 15 years and calculate again.
At 25 years the payment is about 1,001 and interest adds up to about 100,374; at 15 years the payment rises to about 1,430 and interest drops to about 57,000. The payment grows, but the total cost falls substantially.
Check with 0 interest: the payment must be the amount divided by the months. Download the table and verify the last row’s balance is zero.
View tool screenshot
