Fixed-Principal Loan Calculator

Every month this structure retires exactly the same slice of debt: on a $300,000 loan over 30 years that is $833.33 of principal, month in and month out. The interest line is what moves — it is charged on whatever balance is left, so it falls steadily from $1,625.00 in month 1 to almost nothing at the end. Your total payment therefore declines every single month, from $2,458.33 down to a final $837.85.

A fixed-payment loan is engineered to keep your payment constant, which front-loads interest: early payments retire very little principal. Straight-line amortization attacks the principal at a constant pace instead, so the balance — and the interest it generates — falls faster. On the default example that is $293,312.50 of total interest against $382,633.47 for the fixed-payment equivalent, a saving of $89,320.97. The price of that saving is the higher entry payment: $2,458.33 versus $1,896.20, a $562.13 difference in month 1.

Because the fixed-principal payment falls while the fixed payment never moves, the two curves cross. On the default example that happens around month 126 — a little over ten years in. By month 121 the fixed-principal payment is down to $1,916.67 on a $200,000.00 balance (exactly one-third of the loan retired, leaving two-thirds outstanding), and five months later it slips under the $1,896.20 fixed payment for good. From that point on the straight-line borrower pays less every month and finishes with $89,320.97 more in their pocket.

The same structure sells under three names: straight-line or constant-amortization in the US (commercial and some personal loans), SAC — Sistema de Amortização Constante in Brazil, where savings-funded and FGTS housing loans are written this way, and 元金均等返済 (gankin-kintō) in Japan, the standard alternative to the fixed 元利均等 mortgage. The math on this page is the same for all three.