Loan Payment and Amortization Calculator
Three parameters determine a monthly payment: amount, rate and term. The decisive trade-off is the term, which lowers the payment but inflates the total interest cost. This simulator shows the payment, the total cost and the year-by-year breakdown.
The payment formula
C = principal · i = annual rate ÷ 12 · n = term in months
The monthly rate is the annual rate divided by 12 — the actuarial convention used by French mortgage lenders. On €200,000 at 3.5% over 20 years, the payment lands near €1,160, for roughly €78,000 in total interest.
Short term or long term
Stretching the term lowers the payment, but each extra year adds interest computed on capital that stays high longer. Going from 15 to 25 years on the same amount can cut the payment by 25–30% while raising the total cost by 60–80%.
| Term | Effect on payment | Effect on total cost |
|---|---|---|
| Shorter | Higher | Sharply lower |
| Longer | Lower | Sharply higher |
Costs on top of the payment
- Borrower insurance: 0.10–0.45% of the capital per year depending on age and cover level; often 10–20% of the total cost.
- Arrangement and guarantee fees: a few hundred to a few thousand euros, depending on the lender and guarantee type.
- Notary fees: around 7–8% of the price for existing property in France, 2–3% for new builds.
The debt-to-income ratio — payments divided by net income — is generally capped at 35% in France, insurance included. A €1,100 payment therefore requires about €3,150 in net household income.
FAQ
How is a monthly payment calculated?
Through the constant-annuity formula: the payment never changes, but its composition shifts. Interest dominates the early years; the capital share grows until the last instalment.
Should I choose a short or long term?
A short term costs less in interest but demands a higher payment. A long term protects monthly cash flow at a higher total cost. It depends on your spare income and resale plans.
What is the debt-to-income ratio?
The share of net income absorbed by loan payments. French banks generally cap it at 35%, borrower insurance included.
Is borrower insurance mandatory?
Not legally, but nearly every bank requires it. Since France's Lemoine law, borrowers can switch insurance at any time, including mid-loan.