📈 Finance
Investment Calculator
Use this free investment calculator to get fast, accurate results.
📝 Your Assumptions
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This investment calculator turns any loan amount, interest rate, and term into a clear monthly payment, total interest, and total paid figure. It's built for borrowers comparing mortgages, auto loans, and personal loans who want the real cost before signing. Knowing the total interest — not just the monthly payment — is what separates a smart loan from an expensive one.
How to Use This Calculator
Enter three inputs and the amortization engine does the rest.
1
Enter the loan amount
Type the full amount you're borrowing with no commas, like 400000 for a $400,000 mortgage. This is the principal, not the purchase price — subtract your down payment first. A 20% down payment on a $500,000 home means you enter $400,000.
2
Enter the interest rate
Input the annual percentage rate your lender quoted, such as 6.5 for 6.5%. Use the APR, not the teaser rate, so the result reflects the true cost. Even a 0.5% difference matters: on a $400,000 loan, 6.5% versus 7.0% changes total interest by tens of thousands.
3
Select the loan term
Choose the repayment length in years, typically 15 or 30 for mortgages and 3 to 7 for auto loans. A shorter term raises the monthly payment but slashes total interest. A 15-year $400,000 loan at 6.5% costs far less interest than the same loan stretched over 30 years.
4
Read the monthly payment
The first output shows your fixed monthly principal-and-interest payment. For a $400,000 loan at 6.5% over 30 years, that's about $2,528 per month. This figure excludes property taxes, insurance, and HOA fees, which lenders add to your actual bill.
5
Compare total interest and total paid
The remaining outputs show what the loan truly costs: total interest is the sum of all interest charges, and total paid is principal plus interest. On that $400,000 30-year loan at 6.5%, you'd pay roughly $510,000 in interest alone. Run the same numbers on a 15-year term to see the savings.
What Your Results Mean
Each output tells a different part of the story about what you'll actually pay.
Monthly Payment
This is your fixed principal-and-interest payment, the same every month for the life of the loan. On a $400,000 loan at 6.5% for 30 years, it's about $2,528. Your real housing bill will be higher once taxes and insurance are escrowed.
Total Interest
This is the lender's cut — the cumulative cost of borrowing. A $400,000 30-year loan at 6.5% generates roughly $510,000 in interest, more than the amount you borrowed. Shortening the term or lowering the rate is the fastest way to shrink this number.
Total Paid
Add principal and interest together and you get the full lifetime cost of the loan. That $400,000 loan at 6.5% over 30 years totals about $910,000. Compare this figure across loan offers, not the monthly payment alone.
Term Length Trade-Off
A 15-year term at 6.5% on $400,000 costs about $3,485 per month but only around $227,000 in total interest. You pay roughly $957 more monthly to save about $283,000. The right choice depends on whether cash flow or total cost matters more to you.
Interest Rate Sensitivity
Rates compound across the whole balance, so small changes have outsized effects. Going from 6.5% to 7.0% on a $400,000 30-year loan adds about $128 to the monthly payment and roughly $46,000 in total interest. Always compare APR, not just the headline rate.
Amortization Schedule
Early payments are mostly interest; later payments are mostly principal. In month one of a $400,000 loan at 6.5%, about $2,167 of the $2,528 payment goes to interest. By year 25, the split reverses and most of each payment reduces the balance.
Key Terms
Principal
The original amount you borrow, before any interest is added. On a $400,000 mortgage, the principal is $400,000 and every payment chips away at it.
Amortization
The process of paying off a loan through scheduled payments that cover both interest and principal. Early payments are interest-heavy; later ones are principal-heavy.
APR
Annual Percentage Rate — the interest rate plus lender fees, expressed as one yearly number. It's the fairest way to compare two loan offers side by side.
Loan Term
The length of time you have to repay the loan, usually measured in years. Common terms are 30 and 15 years for mortgages and 3 to 7 years for auto loans.
Total Interest
The sum of every interest charge you'll pay over the life of the loan. It's the true cost of borrowing and often rivals or exceeds the principal itself.
❓ Frequently Asked Questions
The calculator uses the standard amortization formula: M = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the principal, r is the monthly interest rate (annual rate divided by 12), and n is the total number of monthly payments. For a $400,000 loan at 6.5% over 30 years, r is 0.005417 and n is 360, which produces a monthly payment of about $2,528. That payment stays fixed for the entire term, but the split between interest and principal shifts every month. In the first payment, roughly $2,167 goes to interest and only $361 reduces the balance. By the final year, nearly the entire payment hits principal. If you want to see how a different loan type changes the math, run the same numbers through our mortgage calculator or auto loan calculator for side-by-side comparisons.
Interest is charged on your outstanding balance every month, and a 30-year term gives it three decades to compound. On a $400,000 loan at 6.5% over 30 years, you pay about $510,000 in total interest — more than the principal itself. The reason is that you're borrowing a large balance for a long time at a rate that applies annually. Shorten the term to 15 years and total interest drops to roughly $227,000, a savings of about $283,000, even though the monthly payment rises from $2,528 to about $3,485. Drop the rate to 5.5% on the 30-year loan and interest falls to about $408,000. The two levers that control total interest are term length and interest rate — nothing else moves the number as much. Use our loan calculator to test both levers on your own numbers.
A 15-year term saves enormous interest but demands a much higher monthly payment. On $400,000 at 6.5%, the 15-year payment is about $3,485 versus $2,528 for 30 years — a difference of roughly $957 per month. In exchange, you save about $283,000 in total interest and own the home outright 15 years sooner. The 30-year term wins if the lower payment lets you invest the difference or keeps your budget comfortable. If you invested that $957 monthly at a 7% average annual return for 15 years, you'd accumulate roughly $302,000 — comparable to the interest savings. The decision comes down to discipline and cash flow, not just arithmetic. If you're weighing a home purchase, our mortgage calculator adds taxes and insurance to give you the full monthly picture.
Not always — fees and points can erase a rate advantage. A lender offering 6.25% with $8,000 in closing costs may cost more over five years than one offering 6.5% with $2,000 in fees. That's why you compare APR, which bundles rate and fees into one number. On a $400,000 30-year loan, dropping from 6.5% to 6.25% saves about $63 per month and roughly $22,700 in total interest — but if it costs $6,000 extra upfront, your break-even point is about 95 months, or nearly eight years. If you plan to sell or refinance before then, the lower rate loses. Always ask for a Loan Estimate and compare APR, total interest, and total paid together. Our loan calculator lets you plug in both scenarios so you can see the break-even yourself.
The calculator shows principal and interest only — the four walls of the loan itself. Your actual monthly bill usually includes property taxes, homeowners insurance, and possibly mortgage insurance and HOA dues. On a $400,000 home, property taxes at 1.2% of value add about $400 per month, and insurance adds another $100 to $150. If your down payment is under 20%, private mortgage insurance can add $150 to $300 monthly on top of that. So a $2,528 principal-and-interest payment could become a $3,200 to $3,400 total housing payment. Lenders qualify you on the full number, not just P&I, which is why a pre-approval amount often feels higher than what you're comfortable paying. Our mortgage calculator includes fields for taxes and insurance so you can see the real monthly figure before you shop.
Extra principal payments cut interest dramatically because they shorten the loan's life. On a $400,000 30-year loan at 6.5%, adding $200 per month to the $2,528 payment pays the loan off in about 24 years instead of 30 and saves roughly $115,000 in interest. Add $500 monthly and you finish in about 19 years, saving around $190,000. The catch: you must tell your servicer to apply the extra amount to principal, not to next month's payment, or it won't help. Even one extra full payment per year — about $2,528 — shaves roughly four years off the term and saves about $75,000. The earlier you start, the more you save, because extra dollars in year one eliminate decades of compounding interest. Run your own numbers in our loan calculator and compare the total interest with and without extra payments.
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