The formula, and what it hides
The monthly payment comes from the standard amortisation formula: M = C · t / (1 − (1 + t)−n), where t is the annual rate divided by twelve and n the number of months. On 200 000 at 3 % over 20 years it gives 1 109.20 a month and 66 207 of interest.
What it does not include, and what your lender will add: borrower's insurance, often 0.1 to 0.4 % of the capital per year, and arrangement fees. Those can move the real monthly figure by more than a rate difference of half a point.
Term is a lever with two edges
Stretching the term lowers the monthly payment and raises the total cost, and the effect is steeper than most people expect. The same 200 000 at 3 % costs 66 207 in interest over 20 years and 103 554 over 30 — half as much again, for a payment only 266 lower.
Try both in the calculator before deciding. The monthly figure is what you feel; the total is what you pay.
Frequently asked questions
Is insurance included?
No. This is the loan itself. Borrower's insurance and arrangement fees are added by the lender and vary by profile.
Which loans does it cover?
Any fixed-rate amortising loan with constant payments — mortgage, car, personal. Not variable-rate or interest-only structures.
Is the rate the APR?
No, it is the nominal annual rate. The APR also includes insurance and fees, so it is always higher.
Is my data sent anywhere?
No, the calculation runs in your browser.