Payment Calculator
Calculate loan payments, determine how much you can afford to borrow, or find the interest rate you qualify for. This calculator helps you understand your loan affordability and payment options.
Payment Summary
Affordability Check
Payment Comparison
Understanding Payment Calculations
A payment calculator helps you determine monthly loan payments, maximum loan amounts you can afford, or interest rates you qualify for. Understanding these calculations is essential for making informed borrowing decisions.
How Payment Calculations Work
The Payment Formula
Payment = P × [r(1+r)^n] / [(1+r)^n - 1]
Where: P = Principal, r = Monthly Rate, n = Number of Payments
Principal
Amount you're borrowing
Higher principal = Higher payment
Interest Rate
Annual rate divided by 12
Higher rate = Higher payment
Loan Term
Longer term = Lower payment
But more total interest
Debt-to-Income Ratio (DTI)
DTI ratio measures how much of your income goes toward debt payments. Lenders use this to assess your borrowing risk. A lower DTI ratio indicates better affordability.
Payment Calculator Modes
Calculate Payment
Enter loan amount, rate, and term to find monthly payment
Most common use case
Calculate Loan Amount
Enter payment, rate, and term to find maximum loan amount
Determine affordability
Calculate Interest Rate
Enter payment, amount, and term to find required rate
Advanced analysis
Term Length Impact
15-Year vs 30-Year Terms
| Loan Amount | 15-Year Payment | 30-Year Payment | Interest Savings |
|---|---|---|---|
| $200,000 | $1,698 | $1,074 | $147,000 |
| $300,000 | $2,547 | $1,611 | $220,000 |
DTI Guidelines
Conventional Loans
- Front-end DTI: =36%
- Back-end DTI: =43%
- Some lenders allow up to 50%
FHA Loans
- Front-end DTI: =31%
- Back-end DTI: =43%
- More flexible for first-time buyers
Key Takeaways for Payment Calculations
- Monthly payments are calculated using the standard loan payment formula
- Shorter loan terms mean higher payments but less total interest
- DTI ratio is crucial for loan approval and affordability
- Lenders typically want DTI below 43% for conventional loans
- Always calculate what you can afford before applying for loans
- Consider both front-end and back-end DTI ratios
- Extra payments can significantly reduce total interest