Loan calculation
Both repayment methods are calculated side by side, so you see the difference at a glance.
Equal paymentSame payment every month, with more interest early on;Equal principalA fixed principal payment each month, with the payment shrinking month by month: less interest overall, but heavier at the start. Below is a comparison for the same loan.
When to use it
- You are choosing between equal payment (annuity) and equal principal on the same loan and want the monthly payment, total interest and first-month gap side by side before deciding whether the interest saving is worth the early pressure.
- You have a bank quote and want a quick sanity check on total interest, or to see where a 20-year and a 30-year term each push the monthly payment and the total repaid.
When not to
- You need a month-by-month amortization schedule — the balance remaining in year five, or what an early repayment would save. This page returns totals only.
- Your rate floats with LPR, or you are combining a provident-fund loan with a commercial loan at different rates: the tool takes one fixed annual rate and one loan.
Everything runs in your browser; the loan amount and rate are never uploaded. Estimate only, not financial advice: one fixed annual rate with monthly compounding, no LPR repricing, no early repayment, no mixed provident-fund and commercial loan, no fees or penalties, and no amortization schedule.
Frequently asked
How do I work out an early repayment?
This tool does not model early repayment. What you save depends on when you repay, how the bank applies it (shorter term or lower payment) and whether a penalty applies — all bank-specific, so a generic formula would mislead. To rough it out: take the remaining principal at the repayment month from the bank's schedule, then rerun this page with the remaining term and the same rate. Because equal payment front-loads interest, repaying in the first few years saves noticeably more than later on. This is a description of the calculation, not financial advice.
Same rate — why is equal principal so much cheaper in total interest?
Interest is charged on the principal still outstanding. Equal principal repays a fixed slice of principal each month, so the balance falls faster and the money is borrowed for less time on average. Equal payment keeps the instalment flat, so early instalments are mostly interest and the balance falls slowly. The trade-off is cash flow: equal principal has the highest first payment, which is the 'extra first-month pressure' figure on this page. The gap widens with longer terms and higher rates. If the higher first payment eats your emergency fund, the flat instalment is the more practical choice.
Why is my bank's number tens or hundreds different?
Typical causes: banks accrue interest on actual days, so a first instalment that does not cover a full month is prorated by day; a rate change (LPR repricing) splits interest into segments; rounding rules differ, and banks usually round each instalment to the cent then back out the interest; and insurance, valuation or account fees are not in this model. This page uses the standard annuity formula, monthly compounding, one fixed rate for the whole term and no fees — good for magnitude and direction, not for matching a contract.