Short answer
A $200,000.00 loan at 6% annual interest over 30 years costs $1,199.10 per month, $431,676.00 in total, and $231,676.00 in interest. Use the formula below with your own loan amount, rate and term, or try the Business Loan Payment Calculator for an instant result.
The formula
Monthly payment = P × r × (1 + r)n ÷ ((1 + r)n − 1), where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the number of monthly payments (years × 12). The formula gives principal and interest only. Taxes, insurance and fees are separate.
Worked example: $200,000.00 at 6% for 30 years
Step 1: the monthly rate is 6% ÷ 12 = 0.5% (0.005). Step 2: the number of payments is 30 × 12 = 360. Step 3: apply the formula: $200,000.00 × 0.005 × (1.005)360 ÷ ((1.005)360 − 1) = $1,199.10 per month. Step 4: the total paid is $1,199.10 × 360 = $431,676.00, so the interest is $431,676.00 − $200,000.00 = $231,676.00. That is the same result the Business Loan Payment Calculator gives for these numbers.
Monthly payments for a $200,000.00 loan
Principal and interest only. A shorter term raises the monthly payment but cuts the total interest sharply.
| Interest rate | Term | Monthly payment | Total paid | Total interest |
|---|---|---|---|---|
| 6% per year | 15 years | $1,687.71 | $303,787.80 | $103,787.80 |
| 6% per year | 20 years | $1,432.86 | $343,886.40 | $143,886.40 |
| 6% per year | 30 years | $1,199.10 | $431,676.00 | $231,676.00 |
| 5% per year | 30 years | $1,073.64 | $386,510.40 | $186,510.40 |
| 7% per year | 30 years | $1,330.60 | $479,016.00 | $279,016.00 |
What changes the payment
The interest rate matters most, then the term, then the amount. A longer term lowers the monthly payment but raises the total interest: the same $200,000.00 loan at 6% costs $103,787.80 in interest over 15 years ($1,687.71 per month) but $231,676.00 over 30 years ($1,199.10 per month). A lower rate lowers both the payment and the total interest.
Common mistakes
The most common mistake is comparing only the monthly payment and ignoring the total interest. The next is forgetting that the formula covers principal and interest only, so taxes, insurance and fees come on top. The third is mixing up the annual rate and the monthly rate: always divide the annual rate by 12 before using the formula.
Try it with your own numbers
Open the Business Loan Payment Calculator, enter your loan amount, rate and term, and it gives the monthly payment and total interest. For a home loan, see the Home Loan Calculator, and for a car loan, see the Car Loan Payment Calculator. More guides are on the BuildCalc Blog and in Loans & Mortgages calculators.
Results are estimates and general information only. Always confirm final figures with your lender or a qualified professional.