At 6.5% a year, a $500,000 loan over 180 months costs $4,305 a month on the annuity system. Change the rate below to match your own offer.
Every instalment is the same size. Early payments are mostly interest.
This is arithmetic on the numbers you enter, not a quote. A real contract costs more — see what is left out, below the result.
Monthly payment
| Repayment system | First payment | Last payment | Total interest |
|---|
Fixed principal pays less interest overall; fixed payment starts cheaper. Which one fits depends on circumstances this calculator does not know.
| Year | Principal | Interest | Balance |
|---|
On the annuity system — a fixed payment every month — you would pay $4,305 for 180 months, coming to $774,825 in all. Of that, $274,825 is interest: the loan costs 55% of what you borrowed, on top of the principal.
The constant-amortisation system starts higher and ends lower: $5,409 in the first month, $2,792 in the last. It pays $36,734 less interest overall, because the balance falls faster from the start. Whether you can afford the first payment is the only question that decides between them.
Both figures assume 6.5% a year for the whole term and no fees. A real offer adds insurance, administration and origination costs, which is why the number your bank quotes will be higher than this one — this page tells you the shape of the debt, not the final invoice.
$4,305 at 6.5% a year on the annuity system, where the payment never changes. On constant amortisation it starts at $5,409 and falls to $2,792. Enter your own rate above to see both for your offer.
$274,825 on the annuity system, or $238,091 on constant amortisation — a difference of $36,734 for the same loan. Longer terms cost dramatically more: the interest grows faster than the term does.
No. This is the arithmetic of the debt at the rate shown, without insurance, fees or taxes, which every real contract adds. Use it to compare offers and to see how term and rate move the payment — not as a quote.
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