Loan calculator: monthly payments, interest and repayment schedule
Enter the loan amount, interest rate and term to see your monthly payment, the total interest and an estimate of the APR straight away. The calculator works for personal loans, car loans and mortgages, with equal monthly payments or equal principal repayments.
Repayment schedule
| Year | Paid | Principal | Interest | Balance |
|---|---|---|---|---|
| 1 | £3,479.88 | £2,652.01 | £827.87 | £12,347.99 |
| 2 | £3,479.88 | £2,815.58 | £664.30 | £9,532.41 |
| 3 | £3,479.88 | £2,989.25 | £490.63 | £6,543.16 |
| 4 | £3,479.88 | £3,173.61 | £306.27 | £3,369.55 |
| 5 | £3,480.06 | £3,369.55 | £110.51 | £0.00 |
Indicative calculation. Your actual payment depends on the lender’s offer, the drawdown date and other costs.
How the monthly payment is calculated
With a standard repayment (annuity) loan, every monthly payment is the same. It is worked out with this formula:
M = P × r × (1 + r)n / ((1 + r)n − 1)
- P is the amount borrowed,
- r is the monthly interest rate, i.e. the nominal annual rate divided by 12,
- n is the number of monthly payments.
Example: borrowing £15,000 at 6% over 5 years (60 payments) costs £289.99 a month. You pay £2,399.58 in interest, so £17,399.58 in total.
Each payment is made up of interest and capital. At the start most of it is interest; as the balance falls, more of each payment goes towards the capital. The repayment schedule below the calculator shows exactly how this works.
Equal payments or equal principal
With equal payments (annuity), the amount stays the same for the whole term, which makes budgeting easy. With equal principal repayments, you repay the same slice of capital every month, so the first payment is the highest and it then falls steadily.
In the same example (£15,000, 6%, 5 years) the first equal-principal payment is £325.00 and the last is £251.25. Total interest is £2,287.50, which is £112.08 less than with equal payments because the balance falls faster.
Nominal rate and APR
The nominal rate is used to calculate interest. The APR (annual percentage rate) shows the true yearly cost of borrowing: it reflects monthly interest and fees such as an arrangement fee. That is why the APR is always a little higher than the nominal rate.
At a nominal rate of 6% with monthly payments, the effective rate is about 6.17%. Add an arrangement fee of 1% (£150.00) and it rises to about 6.61%. When comparing offers, always compare the APR rather than the headline rate.
Monthly payment on a £100,000 mortgage
The table shows the monthly payment on a £100,000 repayment mortgage at different interest rates and terms.
| Interest rate | 20 years | 25 years | 30 years |
|---|---|---|---|
| 3% | £554.60 | £474.21 | £421.60 |
| 4% | £605.98 | £527.84 | £477.42 |
| 5% | £659.96 | £584.59 | £536.82 |
| 6% | £716.43 | £644.30 | £599.55 |
A longer term lowers the monthly payment but adds a lot of interest. On £100,000 over 25 years at 4%, the payment is £527.84 and total interest is £58,350.44.
Fixed or variable rate
A fixed rate stays the same for the agreed period, so your payment is predictable. A variable rate moves with a reference rate and can go up or down during the term. In the UK, variable-rate mortgages usually track the Bank of England base rate or follow the lender’s standard variable rate (SVR).
Before you borrow
- Compare the APR of different offers, not just the headline interest rate.
- Check every cost: arrangement fees, insurance, valuation and legal fees.
- Find out whether early repayment is allowed and what it costs.
- Leave room in your budget in case a variable rate goes up.
For more on your rights as a borrower, see the Financial Conduct Authority (FCA).
Indicative calculation. Your actual payment, APR and repayment schedule are set out in the lender’s offer and credit agreement.
Frequently asked questions
How do I calculate a monthly loan payment?
For an annuity loan, use M = P × r × (1 + r)^n / ((1 + r)^n − 1), where P is the amount borrowed, r the monthly rate (annual rate divided by 12) and n the number of payments. The calculator on this page does it for you.
What is the monthly payment on £15,000 over 5 years?
At 6% with equal payments, the monthly payment is £289.99. Total interest is £2,399.58 and you repay £17,399.58 in total.
What is APR?
The annual percentage rate (APR) shows the true yearly cost of a loan, including monthly interest and fees. At a nominal rate of 6% with a 1% arrangement fee, the APR is about 6.61%.
Equal payments or equal principal: which is better?
Equal payments are easier to budget for. Equal principal means higher payments at the start but less interest overall. On £15,000 over 5 years at 6%, the difference is £112.08.
What is the monthly payment on a £100,000 mortgage over 25 years?
At 4%, the monthly payment is £527.84 and total interest is £58,350.44. At 5%, it is £584.59 a month.
How much does a 1 percentage point lower rate save?
On £100,000 over 25 years, 4% instead of 5% cuts the monthly payment by £56.75 and total interest by £17,026.61.