Repayment types compared
- Equal payments (amortizing; 원리금균등): the same total payment every month. Early payments are mostly interest, later ones mostly principal. Most fixed-rate mortgages work this way.
- Equal principal (원금균등): the principal is split evenly and interest is charged on what is left. The first payment is the largest, payments shrink over time, and total interest is lower than with equal payments.
- Interest-only (balloon; 만기일시): you pay only interest and repay the whole principal in the last month. Monthly payments are smallest but total interest is highest.
How it’s calculated
Monthly rate r = annual rate ÷ 12 · payments n = number of months
Equal payment = principal × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)
Equal principal payment = principal ÷ n + remaining balance × r
Interest-only payment = principal × r
Equal payment = principal × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)
Equal principal payment = principal ÷ n + remaining balance × r
Interest-only payment = principal × r
Each month’s interest is the remaining balance times the monthly rate. The last payment is adjusted to clear whatever principal is left.
Example: ₩100 million at 5% for 30 years
| Type | First payment | Last payment | Total interest |
|---|---|---|---|
| Equal payments | ₩536,822 | ₩536,822 | ₩93,255,784 |
| Equal principal | ₩694,444 | ₩278,935 | ₩75,208,333 |
| Interest-only | ₩416,667 | ₩100,416,667 | ₩150,000,000 |
Example: U.S. 30-year fixed, $300,000 at 6%
| Type | First payment | Last payment | Total interest |
|---|---|---|---|
| Equal payments | $1,798.65 | $1,798.65 | $347,514.57 |
| Equal principal | $2,333.33 | $837.50 | $270,750.00 |
| Interest-only | $1,500.00 | $301,500.00 | $540,000.00 |
A real U.S. mortgage payment can also include property tax, homeowners insurance and mortgage insurance (PMI). This shows principal and interest only.
Good to know
- Lenders that charge interest on actual days in each month will show slightly different amounts from month to month.
- With a grace period you pay only interest at first and repay the principal over the remaining term. This calculator has no grace period.
- Variable-rate loans are recalculated from the remaining balance and term whenever the rate changes.
- Prepayment fees, stamp duty, guarantee fees and similar costs are not included.
FAQ
Which is better, equal payments or equal principal?
Equal principal costs less interest overall but has higher payments at the start. Equal payments keep every month the same.
What does a U.S. mortgage payment include?
Often principal, interest, property tax and insurance (PITI), plus PMI with a small down payment. This calculator covers principal and interest only.
Can I enter the term in months?
Yes. Choose “months” next to the term to enter something like 18 months. It handles up to 600 months (50 years).
For reference only. Actual amounts and decisions depend on your contract, your workplace and how the authorities apply the rules. In Korea, the Financial Supervisory Service’s FINE portal compares loan products; in the U.S., the CFPB has mortgage guides.
Sources
- Financial Supervisory Service — FINE consumer portal
- Consumer Financial Protection Bureau — What is PITI?