Mortgage calculator
Amount borrowed, rate, term and insurance rate: the calculator derives the monthly payment, the total cost of the credit and how each instalment splits between interest and repayment of capital. The chart shows that split reverse over the years.
Why the early years repay so little capital
A standard mortgage has a constant monthly payment: you pay the same amount every month, from first to last. What changes is its composition. Interest is calculated on the capital still outstanding; that is at its highest at the start, so interest is too, and the share going to repayment is correspondingly small.
As the capital falls, interest falls with it, and the share of capital repaid rises — faster and faster. That is why a borrower selling after five years has often repaid far less than they assumed, and why an early repayment saves less interest the later it comes.
What the term really costs
Extending the term lowers the monthly payment and raises the total cost, and the two effects are not the same size. Going from twenty to twenty-five years lightens the instalment by a few per cent, but adds five years of interest on a capital that falls slowly.
The calculator shows both figures side by side, precisely because mortgage negotiations too often turn on the monthly payment alone.
How insurance is counted here
Borrower insurance is calculated on the original capital, and therefore stays constant from the first month to the last. That is the convention of the group policies French banks offer, and the one js/tools/loan/LoanSimulator.js applies.
Individual policies often price the premium on the capital outstanding instead: it then falls as the loan is repaid, and the total cost of the insurance is appreciably lower. If your offer works that way, the figure shown here is an upper bound, not your actual cost.
One last gap to keep in mind: the calculator works from the nominal rate and the insurance. The French TAEG, like an APR, also folds in arrangement, guarantee and broker fees — and that is the figure law requires you to compare between lenders.
Frequently asked questions
Does the calculation include arrangement and guarantee fees?
No. It uses the amount borrowed, the nominal rate and the insurance. Arrangement, guarantee and broker fees belong to the APR, which will therefore be slightly above the rate you enter.
Is insurance calculated on the outstanding balance?
No, on the original capital: the premium is constant for the whole term. An individual policy indexed on the outstanding balance would cost less than the calculator shows.
Why does the total cost rise so much with the term?
Because interest is calculated on a capital that falls slowly. Five more years means five more years of interest on a balance that is still high.