Mortgage Calculator
Mortgage calculator with fixed payments (Price) and constant amortization (SAC) side by side, down payment, nominal or effective rate and a yearly schedule.
In the US, the UK and Portugal the advertised rate is usually nominal (APR, TAN). In Brazil and Colombia banks quote the effective annual rate. 12% effective is 0.949% a month; 12% nominal is 1%.
No currency is shown on purpose: the figures come out in whatever unit you type in.
| Year | Paid | Interest | Principal | Balance |
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What it does
This calculator shows what a mortgage really costs under the two repayment systems used around the world. With fixed payments (the Price or annuity system) every instalment is the same, and at the start most of it is interest. With constant amortization (SAC, common in Brazil) you repay the same amount of principal every month, so the first payments are higher but the balance falls faster and the total interest is lower. Enter the price, the down payment, the rate and the term to see both side by side, with a year-by-year schedule.
How to use it
- Enter the property price and the down payment, as an amount or as a percentage of the price.
- Enter the annual interest rate and choose whether it is nominal (APR) or effective. The bank's offer or contract says which one it is.
- Compare the two systems and look at the schedule to see how the balance falls year by year.
The arithmetic runs in your browser. Nothing you type is sent anywhere and nothing is stored, so you can use these with real numbers.
Frequently asked questions
What is the difference between the Price and SAC systems?
In the Price system the payment is fixed: early on it is mostly interest, and the share of principal grows each month. In SAC the principal repaid each month is fixed, and the interest falls with the balance, so the payment starts higher and drops steadily. For the same rate and term, SAC always costs less interest in total, at the price of a heavier start.
Is the annual rate nominal or effective?
It depends on the country and on the contract. An APR or TAN is nominal: the monthly rate is the annual rate divided by 12. An effective annual rate already includes monthly compounding, and the monthly rate is smaller: 12% effective is 0.949% a month. Using the wrong one changes the payment by a few percent, so check the wording in the offer.
Does the payment include insurance, taxes or fees?
No. The calculation covers only the loan itself: principal and interest. Real mortgages often add mandatory insurance, property taxes, administration fees or indexation of the balance to inflation, which vary by bank and country. Ask the bank for the total effective cost to compare offers.
Why is so little of the balance paid off in the first years?
Because the interest of each month is charged on the whole outstanding balance. With fixed payments, the first instalments are mostly interest, and the principal only starts to fall quickly in the second half of the term. Extra payments early on are the ones that save the most interest.
Wikipedia — Mortgage calculator
Wikipedia — Amortization schedule
Wikipedia — Annual percentage rate
Wikipedia — Effective interest rate