Enter the loan principal, annual rate, and term to compute the monthly payment, total interest, and total amount paid, revealing the full amortization picture.
Input Data
Results
At a glance:Amortization spreads a loan into equal periodic payments that cover both interest and principal, with the total paid being principal plus all interest.
Formula
monthlyPayment = P × r·(1+r)^n / ((1+r)^n − 1) (r = annualRate/12, n = years×12)
totalPaid = monthlyPayment × n
totalInterest = totalPaid − P
$$\text{PMT} = \dfrac{P \times r}{1 - (1+r)^{-n}}, \quad r = \dfrac{\text{annual rate}}{12}, \; n = \text{years} \times 12$$$$\text{Total Interest} = \text{PMT} \times n - P$$How to Use
- Enter the loan principal.
- Enter the annual rate and repayment term.
- Review the monthly payment, total interest, and total paid.
FAQ
Why is most of the early payment interest?
Under equal instalments, each period's interest = current outstanding balance × monthly rate. Early on the balance is largest, so interest is highest; as you repay, the balance shrinks, interest falls and the principal portion grows. That is also why early prepayments or a shorter term save so much interest.
Is a longer term always better?
A longer term lowers the monthly payment and eases immediate cash flow, but because you borrow for longer, total interest rises substantially. Balance monthly affordability against total interest cost.
Are Hong Kong mortgage rates fixed?
Most Hong Kong mortgages are floating, linked to Prime (P) or HIBOR (H), and move with the market, usually with a cap rate. This calculator uses a fixed rate for estimation, so actual payments will vary with rate movements.
What is an amortization schedule and how do I read the principal/interest split?
An amortization schedule lists each period's payment broken into interest and principal, plus the remaining balance, so you can see how the loan evolves. The key is that the total instalment stays fixed while the interest/principal split shifts: interest = balance × monthly rate, so at the start the balance is largest and interest is highest while principal repaid is smallest; as the balance falls, interest shrinks and the fixed payment repays ever more principal, until the final period clears the balance. For example, on HK$3m at 3.5% over 30 years, the first month's interest is about HK$8,750 and only ~HK$4,720 goes to principal, whereas by month 300 interest may be only a couple of thousand while over HK$10k repays principal. Reading the schedule shows why selling after just a few years means little principal is paid off, why early extra repayments save the most interest, and what the outstanding balance is at any point (useful for refinancing or equity).
What is the difference between equal instalment and equal principal, and which does Hong Kong use?
These are two repayment methods differing mainly in whether the monthly payment is fixed and in total interest. Equal instalment (this calculator's model, the norm in Hong Kong) keeps the monthly payment fixed and just shifts the interest/principal mix over time — easier budgeting but slightly higher total interest, suiting most owner-occupiers. Equal principal repays the same principal amount each month, so interest (on the shrinking balance) falls and the monthly payment declines over time; total interest is lower but early payments are heaviest and budgeting is harder. In Hong Kong, almost all residential mortgages use equal instalment. If you want the interest-saving effect of equal principal within an equal-instalment loan, make extra principal repayments early (see the Mortgage Prepayment Calculator).
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.