What’s the difference between annuity and serial loans?

An annuity loan has a fixed total monthly payment, where the interest share falls and principal share rises over time. A serial loan has a fixed principal payment each month, while the interest share falls with the remaining balance. Annuity is smoother (easier to budget, more expensive overall), serial is heavier at the start but lower total interest and faster paydown. Most Norwegian mortgages are annuities because they’re more predictable for household finances.

Nominal vs effective rate?

Nominal rate is the raw rate on the loan, without fees and with annual compounding. Effective rate includes setup fee, monthly fees, and monthly compounding, so it’s always higher. Norwegian law requires the effective rate to be shown on all loan offers so consumers can compare. A 0.3–0.7 percentage point spread is normal for mortgages; 2–5 pp for consumer loans. Always use effective rate when comparing offers.

What happens if the rate rises?

With a floating rate, the bank’s rate follows the central bank rate plus a margin. A 1 percentage-point rise on a 3-million loan adds ~1500 kr/month. Fixed-rate contracts lock the rate for 3, 5, 10 years or longer, but at a higher starting rate. Always stress-test your loan with 3–5 pp higher rate to check resilience. That’s also what regulators require banks to do in their assessments.

Does the calculation include fees and setup cost?

No. The calculator gives pure interest numbers based on the nominal rate. Setup fee (2000–5000 for a mortgage), monthly fees (0–50 kr/month), registration fee and holding fees come on top. For accurate total cost use the loan’s effective rate or ask the bank for "total cost over the full term". Our calculator is best for comparing raw interest offers or checking monthly load.

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Loan Calculator - Monthly Payment & Total Interest

Calculate monthly payment, total interest, and repayment for an annuity loan from amount, rate, and term.

Loan type

Loan amount

Nominal rate (% per year)

Term (years)

Monthly payment

Total interest

Total repayment: -

Yearly summary

Year	Interest	Principal	Balance

How the loan is calculated

Choose between an annuity loan and a serial loan. With an annuity loan you pay a fixed amount every month for the whole term, and early on most of it is interest. With a serial loan you repay a fixed amount of principal each month while the interest falls, so the payment is highest at the start and decreases over time. A serial loan gives slightly lower total interest.

The monthly amount is calculated as M = P · r / (1 − (1 + r)⁻ⁿ), where P is the loan amount, r is the monthly rate (annual rate / 12), and n is the number of months.

The calculation is indicative and does not include fees or the effective interest rate.

About this tool

The loan calculator works out the monthly payment, total interest and total cost for both annuity and serial (equal-principal) loans. Enter loan amount, nominal rate and term, and you get an overview of what you’ll actually pay. Useful for mortgages, car loans, consumer loans and student loans, or for comparing two bank offers side by side. All local, no server.

How to use it

Enter the loan amount.
Set the nominal annual rate and term in years.
Choose annuity loan (fixed monthly payment) or serial loan (fixed principal).
See monthly payment, total interest and total cost.

Examples

Mortgage 3M, 5%, 25 years

InputAnnuity: NOK 3 000 000, 5%, 25 years

OutputMonthly ~NOK 17 542, total ~5.26 million, interest ~2.26 million

Same as serial loan

InputSerial loan: NOK 3 000 000, 5%, 25 years

OutputFirst month ~22 500, last ~10 042, total interest ~1.88 million

A serial loan has fixed principal (10,000/month here) and falling interest. The first month is expensive, but total interest is lower because the principal is paid down faster. Annuity gives a flat payment that’s easier to budget.

Common use cases

Checking whether you can afford a mortgage before applying.
Comparing two loan offers with different rates or terms.
Seeing the effect of paying off the loan 5 years faster.
Working out total interest over the whole term.
Comparing annuity and serial loans for the same amount.

Frequently asked questions

What’s the difference between annuity and serial loans?: An annuity loan has a fixed total monthly payment, where the interest share falls and principal share rises over time. A serial loan has a fixed principal payment each month, while the interest share falls with the remaining balance. Annuity is smoother (easier to budget, more expensive overall), serial is heavier at the start but lower total interest and faster paydown. Most Norwegian mortgages are annuities because they’re more predictable for household finances.
Nominal vs effective rate?: Nominal rate is the raw rate on the loan, without fees and with annual compounding. Effective rate includes setup fee, monthly fees, and monthly compounding, so it’s always higher. Norwegian law requires the effective rate to be shown on all loan offers so consumers can compare. A 0.3–0.7 percentage point spread is normal for mortgages; 2–5 pp for consumer loans. Always use effective rate when comparing offers.
What happens if the rate rises?: With a floating rate, the bank’s rate follows the central bank rate plus a margin. A 1 percentage-point rise on a 3-million loan adds ~1500 kr/month. Fixed-rate contracts lock the rate for 3, 5, 10 years or longer, but at a higher starting rate. Always stress-test your loan with 3–5 pp higher rate to check resilience. That’s also what regulators require banks to do in their assessments.
Does the calculation include fees and setup cost?: No. The calculator gives pure interest numbers based on the nominal rate. Setup fee (2000–5000 for a mortgage), monthly fees (0–50 kr/month), registration fee and holding fees come on top. For accurate total cost use the loan’s effective rate or ask the bank for "total cost over the full term". Our calculator is best for comparing raw interest offers or checking monthly load.

Technical background

Annuity loan: monthly payment M = P · i / (1 - (1 + i)^-n), where P is loan amount, i = annual rate / 12, n = number of months. Serial loan: fixed principal = P/n, monthly interest = remaining balance · i, first month is heaviest. Total interest = sum of interest shares over all months. All arithmetic in IEEE 754 double-precision, 15th-decimal rounding negligible. Note: we assume constant rate through the term, a clear simplification for floating-rate loans. For rate changes en route (central bank moves), you re-compute from new remaining balance. The model uses nominal / 12 for monthly rate, standard Nordic convention. No data sent to any server.