๐ฆ Loan Repayment Simulator
Enter the loan amount, annual interest rate, and term to simulate the monthly payment, total payment, and total interest. Useful for comparing mortgage, car loan, or student loan options.
How to use
- Enter the loan amount.
- Enter the annual interest rate.
- Enter the repayment term in years.
- The monthly payment, total payment, and total interest are calculated automatically.
How the calculation works
This tool uses level (annuity) repayments, where the monthly payment stays constant โ the most common structure for mortgages and car loans. With principal P, monthly rate r (annual rate รท 12) and n payments (years ร 12), the monthly payment is P ร r ร (1 + r)โฟ รท ((1 + r)โฟ โ 1). The payment is fixed, but its make-up changes: early on, the balance is large, so most of each payment is interest; as the loan is repaid, more of each payment goes to principal. Total repayment is monthly payment ร number of payments, and total interest is total repayment โ principal. At 0% interest, the payment is simply the principal divided by the number of payments. Amounts are rounded to the nearest yen.
Worked example
Borrowing ยฅ30,000,000 at 1.0% over 35 years (420 payments) Monthly payment: about ยฅ84,686 Total repayment: about ยฅ35,567,998 Total interest: about ยฅ5,567,998 At 1.5% instead, the monthly payment is about ยฅ91,855 and total interest about ยฅ8,579,239. Half a percentage point adds roughly ยฅ3 million in interest over 35 years.
Things to be aware of
- Bonus-month payments and early repayments are not modelled.
- Equal-principal repayment (fixed principal each month) produces a different payment profile.
- With a variable rate, payments change when the rate does; this calculation assumes a constant rate throughout.
- Real loans may carry extra costs such as arrangement fees, guarantee fees and credit life insurance.
FAQ
What repayment method is used?
It calculates using the equal-payment method, where the monthly payment amount stays constant.
How is total interest calculated?
It's the total payment (monthly payment ร number of payments) minus the original loan principal.
Can I use this to compare mortgage options?
Yes โ enter different rate and term combinations to compare the monthly payment and total interest side by side.
Can it factor in semi-annual bonus payments?
This tool assumes equal monthly payments only and doesn't model variable-payment plans like bonus-based repayment.
Can I see the effect of an early repayment?
The current version doesn't simulate a lump-sum early repayment directly, but you can approximate the effect by re-entering a shorter term and comparing the results.