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$250,000 at 6.5% over thirty years is $1,580.17 a month, and $318,861.22 of it is interest. Federal law makes a lender disclose four figures about a loan; this page computes one of them, and two of the others cannot be reached from the four fields below. Here is which is which.
Last updated 8 October 2026
Educational estimate only — not financial advice. Real loans include fees, insurance, taxes, and lender-specific terms.
An educational estimate, not a loan offer and not financial, legal or tax advice. This page returns principal and interest on the amount, rate and term you type. It does not model fees, points, escrow, insurance, a variable rate, a precomputed finance charge, or how your servicer applies a payment. Every federal rule quoted below carries its citation; check your own figures against the disclosure your lender is required to give you.
Borrow $250,000 at 6.5% over thirty years and the payment is $1,580.17. That figure is what the box above returns, and it is correct. It is also one of four numbers federal law obliges a lender to put in front of you before you sign, and the only one of the four that says nothing about what the loan costs.
Regulation Z, the rule implementing the Truth in Lending Act, sets out the list in 12 CFR 1026.18 and supplies the plain-language description a lender must print beside each one:
What a closed-end loan disclosure must contain · 12 CFR 1026.18
The payment schedule is a fifth requirement, at 1026.18(g): “the number, amounts, and timing of payments scheduled to repay the obligation”. That is the one this page reproduces. Notice what the calculator above cannot give you. It has no field for a fee, so it cannot compute an amount financed, which 1026.18(b) builds by taking the principal, adding anything else financed that is not part of the finance charge, and subtracting any prepaid finance charge. Without that it cannot compute a finance charge, and without a finance charge there is no APR. Two of the four numbers are unreachable from the four inputs above, and that is a property of the inputs, not a shortcoming you can work around by typing harder.
The formula is the standard amortising payment:
M = P × i / (1 − (1 + i)−n)
with P the amount borrowed, n the number of monthly payments and i the monthly rate. The monthly rate is the annual rate divided by twelve, and dividing is the step people most often skip when checking a quote: 6.5% a year is 0.00541666… a month, not 0.065. Thirty years is 360 payments, so:
$250,000 · 6.5% · 360 payments
i0.065 / 12 = 0.0054166667Two hundred and twenty-six dollars of a $1,580 payment reduces the debt in the first month. That ratio, not the rate, is why a thirty-year loan at a middling rate repays more in interest than the house cost. The crossover, the month where principal first exceeds interest, is payment 233 on these numbers, nineteen and a half years in.
A detail the formula hides. Carry the payment to six decimal places and the loan clears on the 360th payment exactly. A servicer cannot do that, and Regulation Z does not make it try: 12 CFR 1026.17(c)(3)(i) lets a creditor disregard “That payments must be collected in whole cents” when preparing the disclosure. It bills $1,580.17 and charges whole cents of interest every month, and those two roundings do not cancel: run the same loan in whole cents and it takes 361 payments, the last of them 38 cents, with total interest of $318,861.58 rather than $318,861.22. The direction is not fixed. On $300,000 at 6.5% the stub payment is $4.74; on $304,000 at the same rate there is no stub at all and the final payment is $1,917.91 instead of the usual $1,921.49. If a schedule from your lender has one more line than you expected, this is usually why.
These are two different measurements of the same loan and they are routinely treated as interchangeable. The CFPB’s own answer separates them in two sentences. On the rate: it “is the cost you will pay each year to borrow the money, expressed as a percentage rate. It does not reflect fees or any other charges you may have to pay for the loan.” On the APR: “An annual percentage rate (APR) is a broader measure of the cost of borrowing money than the interest rate. The APR reflects the interest rate, any points, mortgage broker fees, and other charges that you pay to get the loan. For that reason, your APR is usually higher than your interest rate.”
The regulation is more exact about what “broader” means. The APR is built from the finance charge, and 12 CFR 1026.4(a) defines that as “the cost of consumer credit as a dollar amount” including “any charge payable directly or indirectly by the consumer and imposed directly or indirectly by the creditor as an incident to or a condition of the extension of credit”, while excluding “any charge of a type payable in a comparable cash transaction”. Paragraph (b) then lists what is inside. Among the entries that catch borrowers out:
The APR is then computed, under 1026.22(a)(1), “in accordance with either the actuarial method or the United States Rule method”, with the equations set out in appendix J to the part. It is a solved rate: the one that makes the amount actually received equal the present value of the payments actually made.
Which is exactly why you should not type it into the field above. The APR is derived from a payment schedule; using it to generate a payment schedule runs the calculation backwards. On $250,000 over thirty years, a loan quoted at 6.5% with an APR of 6.78% has a payment of $1,580.17, not the $1,626.48 you get by entering 6.78. The Loan Estimate anticipates the confusion and prints a warning beside the APR in words Regulation Z dictates, at 12 CFR 1026.37(l)(2): “Your costs over the loan term expressed as a rate. This is not your interest rate.”
The same table carries a third figure worth knowing, the Total Interest Percentage, defined at 1026.37(l)(3) as “the total amount of interest that the consumer will pay over the life of the loan, expressed as a percentage of the amount of credit extended”. On the $250,000 example the TIP is 127.5%: interest alone exceeds the amount borrowed. The payment field above will never tell you that, and the TIP is printed on page three of a form you will be given three days before closing.
Add $50 a month to a $28,000 car loan at 7.4% over 60 months and the result is unambiguous arithmetic:
$28,000 · 7.4% · 60 months
That is one extra payment’s worth of money, spread across the term, buying back a little more than one extra payment’s worth of interest. It works because interest was being charged on a balance, and the extra money made the balance smaller.
On a loan where the finance charge was not computed that way, it does not work, and Regulation Z draws the line in a single paragraph. 12 CFR 1026.18(k) splits every loan in two:
So the useful question about your own loan is not “does prepaying save money”. It is: does my disclosure talk about a penalty or about a rebate? The word that appears tells you which of the two paragraphs your loan falls under, and therefore whether the arithmetic above applies to you.
Where a penalty is possible on a dwelling-secured loan, Regulation Z caps it. Under 12 CFR 1026.43(g)(2) a prepayment penalty on a covered transaction “must not apply after the three-year period following consummation” and must not exceed “2 percent, if incurred during the first two years following consummation” or “1 percent, if incurred during the third year”, of the outstanding balance prepaid. Paragraph (g)(1) allows one only where the rate cannot increase, the loan is a qualified mortgage and it is not higher-priced, and (g)(3) requires the creditor to have offered you a comparable loan without one. None of that applies to a car loan or a personal loan.
An extra payment only produces the saving above if it reduces the balance this month. Where federal rules govern that, they govern it narrowly. 12 CFR 1026.36(c)(1) opens by limiting itself to a closed-end transaction “secured by a consumer’s principal dwelling”, which leaves a car loan, a student loan, a personal loan and a second home outside it entirely. Within that scope it establishes three things worth knowing by name:
The practical consequence is that a round number sent as one lump is the riskiest way to prepay, because a servicer that treats $1,630.17 as a $1,580.17 payment plus $50 of unapplied funds has done nothing wrong. Send the extra as its own transaction, with written instructions that it is a principal reduction, and then verify it. On a mortgage the verification is already built for you: 12 CFR 1026.41(d)(3)(i) requires the periodic statement to show the total received since the last statement “including a breakdown showing the amount, if any, that was applied to principal, interest, escrow, fees and charges, and the amount, if any, sent to any suspense or unapplied funds account”. That last clause is the line to read. If a figure appears there, your extra payment has not been applied.
On a loan outside 1026.36(c), there is no equivalent entitlement and no mandated statement line. Ask in writing how additional amounts are applied, keep the answer, and check the balance yourself after the first one.
Any fee. There is no field for one. Points, origination fees, an appraisal, a document fee, a financed extended warranty: each of them changes the amount financed, the finance charge and the APR, and none of them changes the number above. If a fee is deducted from the loan proceeds you receive less than the figure you typed while owing interest on all of it.
Whether your loan is the kind extra payments help. The extra-payment column assumes interest is charged on the outstanding balance. On a precomputed loan it is not, and the page has no way to tell the difference.
Day counts and the first period. It converts years to months by multiplying by twelve and applies a twelfth of the annual rate each period, which is the same idealised calendar your disclosure is allowed to use. 12 CFR 1026.17(c)(3) permits a creditor to disregard, in making its calculations and disclosures, “That payments must be collected in whole cents”, “That months have different numbers of days” and “The occurrence of leap year”. So the arithmetic here is not a shortcut around the official figure; it is the convention the official figure is permitted to use. What neither models is interest accruing from a disbursement date earlier than the first payment date, which the regulation treats separately at 1026.17(c)(2)(ii) as per-diem interest collected at consummation.
Whole cents. The schedule is computed in fractions of a cent. Yours will be billed in cents, which is where the extra stub payment described above comes from.
A variable rate. One rate, held for the whole term. An adjustable-rate loan has a schedule that changes at each reset, and nothing here projects one.
Taxes, insurance and anything escrowed. Principal and interest only. For a mortgage the amount that leaves your account is materially larger; the components are listed as separate required lines at 12 CFR 1026.37(c)(2).
Whether you will be approved, or at what rate. It takes the rate you type as given. It has no view on your credit, your income, your debt ratio or the collateral.
What a fair offer looks like. It computes a payment from a rate. It cannot tell you whether the rate is good, and it is not a loan offer, a quote, or financial, tax or legal advice.
Boundary behaviour worth knowing, since it is not announced on screen: a term below six months is silently raised to six months, a rate above 100% is silently lowered to 100%, and a negative amount, rate or extra payment is silently treated as zero. In each case the field above is rewritten to the value actually used when you leave it, so check the inputs after the result if you typed something unusual. One further limit belongs to the arithmetic rather than to your loan: at the top of both ranges together, the scheduled payment and the first month’s interest come out exactly equal in the double-precision numbers this page works in, so it reports that it cannot produce a payoff date instead of one it reached by giving up. Measured on 8 October 2026 at this page’s fifty-year maximum term, that starts at 75.12%; over thirty years no rate it accepts reaches it.
Every regulation above was read at the eCFR on 1 October 2026 and quoted from the current text. Every dollar figure on this page was computed independently of the calculator, at fifty significant digits, and then checked against it. Nothing you type leaves your browser. Part of the QuikUtil tools collection; see also the Mortgage Payoff Calculator for what a housing payment carries beyond principal and interest, and the Compound Interest Calculator for the same arithmetic pointing the other way.
With the standard amortising payment formula, M = P × i / (1 − (1 + i)−n), where i is the annual rate divided by 12 and n is the number of monthly payments. Dividing the annual rate is the step people miss when checking a quote by hand: a 6.5% loan uses 0.00541667 a month, not 0.065. On $250,000 over 360 payments that gives $1,580.17.
The rate prices the borrowing; the APR prices the loan. The CFPB puts the first half plainly: the interest rate “is the cost you will pay each year to borrow the money, expressed as a percentage rate. It does not reflect fees or any other charges you may have to pay for the loan.” Regulation Z then defines the APR as “a measure of the cost of credit, expressed as a yearly rate, that relates the amount and timing of value received by the consumer to the amount and timing of payments made” (12 CFR 1026.22(a)(1)), and sweeps points, loan fees and lender-required insurance into the finance charge it is built from (12 CFR 1026.4(b)). Put the interest rate in the box above. Compare offers on the APR.
No, and it is the most common way to get a wrong answer out of a page like this. The APR is already a function of the payment schedule, so feeding it back in as a rate produces a payment nobody will ever bill you. If a lender quotes 6.5% with an APR of 6.78%, the 6.5% is what the payment is built from; typing 6.78 raises the figure above by $46.31 a month on $250,000. The Loan Estimate prints the warning next to the APR itself, in these words: “Your costs over the loan term expressed as a rate. This is not your interest rate.”
Three reasons, and the regulation names the size of two of them. Rounding: a servicer bills whole cents and charges whole cents of interest, so on $250,000 at 6.5% the billed payment of $1,580.17 leaves a 361st payment of 38 cents rather than clearing on the 360th. Regulation Z expects that gap and allows the disclosure to ignore it, at 12 CFR 1026.17(c)(3)(i). Disclosure tolerance: an APR is “considered accurate if it is not more than 1/8 of 1 percentage point above or below” the true figure, or 1/4 point on an irregular transaction (12 CFR 1026.22(a)(2) and (a)(3)). Day counts: some loans accrue from the disbursement date rather than the first payment date, which adds a partial period nothing here models. A difference of a few dollars is ordinary. A difference of twenty usually means fees are inside the loan.
On an interest-on-balance loan, yes, and the saving is larger than most people expect: $28,000 at 7.4% over 60 months costs $5,583.98 in interest, and an extra $50 a month clears it in 55 payments for $5,020.92, saving $563.06 for one extra payment spread over the term. On a precomputed loan the finance charge was fixed at signing and paying early only helps if the contract grants a rebate. Regulation Z makes your paperwork say which you have: 12 CFR 1026.18(k)(1) covers a loan whose charge is “computed from time to time by application of a rate to the unpaid principal balance” and requires a statement about prepayment charges, while (k)(2) covers every other kind and requires “a statement indicating whether or not the consumer is entitled to a rebate of any finance charge if the obligation is prepaid in full or in part.”
Yes, and on most loans there is no federal rule against it. The payment-crediting rules at 12 CFR 1026.36(c)(1) only reach closed-end credit “secured by a consumer’s principal dwelling”, so a car loan, a personal loan and a second home are outside them. Where they do apply, a “periodic payment” is “an amount sufficient to cover principal, interest, and escrow (if applicable) for a given billing cycle”, anything smaller is a partial payment that may sit in “a suspense or unapplied funds account” until enough accumulates, and a payment that does not follow the servicer’s written instructions need only be credited “as of five days after receipt.” Send the extra separately, label it as a principal reduction in writing, and check the next statement.
It depends on the loan, and for mortgages Regulation Z caps it. A prepayment penalty on a covered dwelling-secured transaction “must not apply after the three-year period following consummation” and must not exceed “2 percent, if incurred during the first two years” or “1 percent, if incurred during the third year” of the balance prepaid (12 CFR 1026.43(g)(2)). The lender must also offer you an alternative loan without one. Outside that category there is no federal percentage cap, which is why 12 CFR 1026.18(k) exists: the answer for your loan is on your own disclosure.
No. It returns principal and interest on the amount you type. A mortgage payment also carries escrow for property taxes and homeowner’s insurance and, below 20% equity, mortgage insurance; Regulation Z requires all three plus their total on the Loan Estimate as separate lines (12 CFR 1026.37(c)(2)). An auto loan quote often has an extended warranty or a service contract financed inside the balance. If a fee is paid out of the loan proceeds it belongs in the amount above; if it is billed monthly alongside the loan, this page cannot see it.
No. The arithmetic runs in your browser. Nothing is uploaded, stored or logged.
No. It is arithmetic with its sources named, and it cannot see your fees, your credit, your disbursement date or your contract. Every figure that matters is on the disclosure your lender is required to give you; check it there before signing anything.