Loan & Mortgage Calculator
What should you know before asking for financing?
Whether buying your future home or funding a personal project, understanding how interest works will save you thousands of dollars. Our calculator uses the French Amortization System, which is the standard for most consumer loans and mortgages.
💰 How do you pay your debt?
With the French system, your monthly payment is fixed. However, at the beginning, you pay mostly interest and very little principal. As time passes, the balance shifts.
⚠️ Safety Limit
To maintain optimal financial health, your payment should not exceed 30% of your net income. Exceeding this threshold increases the risk of default.
Key Concepts: Don't get misled
- Nominal Rate: The "pure" price the bank charges you for the money, without additional costs.
- APR (Annual Percentage Rate): The most important indicator. It includes the interest rate plus commissions, mandatory insurance, and closing costs. Always compare offers using the APR.
- Amortization: The process of paying off the borrowed capital. You can make partial prepayments to reduce future installments or the loan term.
Short term or long term?
Choosing a longer term (like 30 years) reduces the monthly payment and provides immediate relief, but it drastically increases the total cost of the loan through interest. If your finances allow it, shorter terms are always the cheapest option.
Common questions about loans and mortgages
What is a fixed-rate vs variable-rate mortgage?
In a fixed-rate mortgage, the payment never changes. In a variable-rate mortgage, your payment depends on a benchmark index (like LIBOR or Euribor) and is reviewed periodically, which can increase or decrease your payment.
Can I pay off my loan early?
Yes, this is called early repayment or prepayment. Banks may charge a small fee for this, but it usually pays off because of the significant interest savings from returning the capital sooner.
Why doesn't the monthly payment match my bank's quote?
This calculator simulates pure interest. Your bank likely adds life insurance, home insurance, or monthly fees that are added to the base payment you see here.