Repayment Calculator Estimate payments, model extra payments, compare interest-only, and refinance wisely — with 2025 ben...
Repayment Calculator
Estimate payments, model extra payments, compare interest-only, and refinance wisely — with 2025 benchmarks and risk insights.
Monthly Payment Formula**:
$$PMT = P \frac{r(1+r)^n}{(1+r)^n - 1}$$
Where: • $P$ = loan amount • $r$ = monthly rate (APR ÷ 12) • $n$ = number of payments
Example** ($250K @ 6.8%, 30 yrs): $$PMT = 250{,}000 \times \frac{0.005667(1.005667)^{360}}{(1.005667)^{360} - 1} = \mathbf{\$1{,}627.46}$$
✅ Pro Tip**: Early payments are mostly interest — Year 1: $16,984 interest, $2,546 principal Year 10: $13,527 interest, $5,997 principal Year 30: $91 interest, $1,536 principal
⚠️ Avoid these costly mistakes:
- Negative amortization** — payment < interest → balance grows (common in option ARMs)
- Precomputed interest** — interest fixed upfront; no savings for early payoff
- Teaser rates** — 3% intro → 8%+ adjustment (check lifetime caps!)
- Prepayment penalties** — 1–2% if paid early (banned for most FHA/conventional, but check older loans)
✅ Pro Tips**:
- Make **extra principal payments in Year 1–5** — max interest reduction
- Switch to **bi-weekly payments** → 13 full payments/year = ~25% faster payoff
- Refinance only if break-even < 3 years (closing costs ÷ monthly savings)
| Loan | Payment | Total Interest | P/I Yr 1 |
|---|---|---|---|
| $250K @ 6.8%, 30 yr | $1,627/mo | $335,720 | 87% interest |
| + $200/mo extra | $1,827/mo | $271,720 | 22.2 yrs |
| $30K @ 7.2%, 6 yr auto | $515/mo | $7,069 | 55% interest |
| $20K @ 10.5%, 5 yr personal | $431/mo | $5,860 | 68% interest |
📉 Extra Payment Impact**:
- $100/mo extra on $250K @ 6.8% → **4.1 yrs saved**, **$31K interest saved**
- $5,000 lump sum in Year 1 → **6.0 yrs saved**, **$48K interest saved**
➡️ Standard Repayment
“$250K loan @ 6.8% for 30 yrs — what’s my payment?” ($1,627/mo)
➡️ Extra Payments
Model $200/mo extra or $10K lump sum — see months and interest saved.
➡️ Interest-Only
Compare 5-yr IO ($1,354/mo) vs. full amortization ($1,627/mo).
➡️ Refinance vs. Overpay
“7.2% → 5.8% refi + $150/mo extra — better than $350/mo extra?” (Yes: $98K vs. $72K saved)
Note: Uses exact amortization math. All extra payments applied to principal. No prepayment penalties assumed.