How to use it
- Enter the price of the home or car and your down payment. The amount you will borrow shows up right below.
- Enter the interest rate (per year or per month, as it appears in the offer) and the term in years or months.
- If the loan has monthly insurance or an admin fee, type it in the optional field. It is added to every payment.
- Compare the two boxes: constant amortization (SAC) and fixed payment (Price). The one with less total interest gets the "Less interest" badge.
- Pick SAC or Price above the chart to see where each year's money goes, then open the month-by-month schedule. You can download it as a spreadsheet.
What it’s for
Before you sign a loan, it pays to know how much you will hand over in total, not just the first payment. This calculator puts the two most common amortization methods side by side:
- Fixed payment (Price, or French amortization): the payment is the same every month. Early on, most of it is interest and the balance falls slowly. This is the standard for car loans, personal loans and most US-style fixed-rate mortgages.
- Constant amortization (SAC): you repay the same slice of principal every month. Because interest is charged on a balance that keeps shrinking, the payment starts higher and gets smaller every month. It is common for mortgages in Brazil, parts of Europe and in many business loans.
With the same rate and term, constant amortization always costs less overall, because you pay the bank's money back sooner. The trade-off is a higher first payment. Fixed payments do the opposite: easier at the start, more expensive at the end. The calculator shows that difference in money so you can decide with numbers instead of guesses.
The "Income for 30% ratio" figure is a quick affordability check. Many lenders want the housing payment to stay around 28 to 30% of gross monthly income. If your income is below that number, try a bigger down payment or a longer term.
How it works
The math follows the formulas lenders use:
- Monthly rate: an annual rate is converted to the equivalent monthly rate with compounding: (1 + annual rate) to the power of 1/12, minus 1. A 12% annual rate becomes about 0.95% per month, not 1%. If your lender quotes an APR that is simply divided by 12, choose "per month" and enter APR ÷ 12.
- Constant amortization: principal per month = amount borrowed ÷ number of payments. Interest = balance × monthly rate. Payment = principal + interest.
- Fixed payment: payment = amount borrowed × rate ÷ (1 − (1 + rate) to the power of −term). Each month's interest comes off the balance first, and the rest of the payment reduces the debt.
The chart splits what you paid in interest from what actually went toward the debt in each year (or each month for terms up to 3 years). Hover or tap the columns to see the numbers. With fixed payments, notice how the orange interest part dominates the early years.
Everything is calculated in your browser. No numbers are sent to a server and there is nothing to sign up for.
What the calculator leaves out
Real loan offers can include other costs, so your lender's figures may differ a little:
- Property taxes and homeowners insurance held in escrow, if your lender collects them with the payment.
- Private mortgage insurance (PMI) when the down payment is under 20%. If you know the monthly amount, use the insurance and fees field.
- Closing costs and points, usually paid upfront or rolled into the loan. To see their effect, add them to the price.
- Variable rates. The calculator assumes the rate stays fixed for the whole term.
Frequently asked questions
Which is better, fixed payments or constant amortization?
If the first constant-amortization payment fits your budget, it almost always costs less, because you pay less interest overall. Fixed payments make sense when you need a lower starting payment or want the same amount every month, knowing it costs more in the end.
Why does the constant-amortization payment go down?
The principal part is the same every month, and interest is charged on the remaining balance, which keeps shrinking. A smaller balance means less interest and a smaller payment.
Can I pay extra to save interest?
Yes. Any extra payment toward principal lowers the balance and every future interest charge, in both systems. Most lenders let you either shorten the term (bigger savings) or lower the payment.
Does this work for car loans?
Yes. Car loans almost always use fixed payments. Enter the car price, the down payment, the rate from the offer and the term in months.
Why is my lender's number different?
Usually because of insurance, taxes, fees and rounding. Use the calculator to compare scenarios, and ask the lender for the APR and an amortization schedule of the actual offer.