Principal and Interest Calculator

A mortgage or other loan requires the borrower to make monthly payments to the lender to repay the interest and principal on the debt. The interest rate is the percentage charged by the lender to borrow the money, while the principal is the amount still owed on the loan. A portion of each monthly payment is applied to the interest on the loan. The remainder of the payment is applied to the principal, which reduces the balance owed on the loan. This is known as loan amortisation.

This principal and interest calculator will help you identify how much of each payment is applied to the principal and how much goes toward interest. You can also see the balance of the principal after each payment and determine how much principal and interest you pay on the loan yearly.

To use the calculator, enter the amount of the loan, the interest rate, and the loan term (number of years) and click calculate. This will reveal your minimum monthly payment, and show you the amortization schedule for each year of the loan. Click through the pages to see the balance of the principal or amount of interest paid each year. The final page will reveal your total interest and principal paid.

Once you've determined your minimum monthly payment, see how paying more on your loan each month will affect your repayment schedule by entering a sum into the "Extra payments per month" field. You can also try adjusting the term of the loan (number of years) to see how much interest reducing the term will save you. As the number of pages of your results decreases, so does the length of time it will take you to repay the loan.


Note: The results from this calculator should be used as an indication only. Results do not represent either quotes or pre-qualifications for a loan. It is advised that you consult your financial adviser before taking out a loan.

Money-Saving Tips:

  • Pay more than the minimum payment each month. Because the interest on the loan is calculated daily based on the balance of the principal, repaying the principal faster decreases the amount of interest paid, saving you money and reducing the term of the loan.
  • Make your monthly payment in two installments. Simply make half of the total payment every two weeks. This will amortise your loan faster, saving you money in interest payments.
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