The numbers behind every loan
| What you want to know | Formula |
|---|---|
| Monthly payment | loan × r ÷ (1 − (1 + r)^−n), with r = annual rate ÷ 12 and n = months |
| Interest this month | balance × r |
| Total interest | payment × n − loan |
| Debt-to-income | monthly debt payments ÷ gross monthly income |
Three habits that save the most money
Compare by APR and total cost, not monthly payment. A longer term always lowers the payment, but almost always raises the total you pay.
Pay extra principal early. Interest is charged on the balance, so extra payments in the first years save the most. Even a small fixed amount each month can take years off a mortgage.
Check the break-even before refinancing. Closing costs only pay off if you keep the new loan long enough for the monthly savings to cover them.
These calculators assume fixed rates and that you enter your own quoted rate; actual offers depend on your credit, the lender and the market.