Equal Payment or Equal Principal? Let a Mortgage Calculator Do the Math

Equal Payment or Equal Principal?

When taking out a home loan, the bank typically asks: equal payment or equal principal? The wrong choice could cost you tens of thousands. Let’s run the numbers with a mortgage calculator.

The Difference Between the Two Methods

Equal Payment (Equal Installment)

• Monthly payment stays the same throughout the loan
• Early payments are mostly interest, less principal
• Best for stable income, predictable budgeting

Equal Principal

• Monthly payment decreases over time
• Less total interest (10-15% less under the same terms)
• Higher payments early on, easier later

Example Calculation

With a $140,000 loan at 4.2% annual rate over 30 years:

• Equal Payment: ~$685/month, ~$106,700 total interest
• Equal Principal: ~$879 first month (decreasing), ~$88,500 total interest

That’s about $18,200 saved — the cost of choosing “convenience.”

Online Mortgage Calculator →

Which Should You Choose?

• First home, stable income → Equal Payment
• Planning to pay off early → Equal Principal
• Investment property → Equal Payment (fixed cost, easier accounting)

Plug in your loan amount, rate, and term — run the numbers before you decide.