# Home improvement loan payment

Computes the monthly payment, total cost, and APR of a fixed-rate home improvement loan with an origination fee taken from the loan or added to it.

- Page: https://www.acalculator.org/finance/home-improvement-loan-calculator
- JSON spec: https://www.acalculator.org/finance/home-improvement-loan-calculator.json
- Version: 2b2fb68c2718

## Default answer

Example with the default inputs (Loan amount $25,000.00, Interest rate 11%, Loan term (months) 60, Origination fee 3%, The fee is Taken from the loan, Loan start date November 1, 2026) on the example date Sunday, November 1, 2026: Borrowing $25,000.00 at 11% over 60 months costs $543.56 a month; with the fee, the APR is 12.34% and the loan costs $8,363.63 in all.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| amount | Loan amount | The amount of the loan you apply for, before any fee. |
| rate | Interest rate | The yearly interest rate your lender quotes, charged monthly at the rate divided by 12. |
| term | Loan term (months) | The number of monthly payments, for example 60, 84, or 120. |
| fee | Origination fee | A one-time fee charged as a percentage of the loan amount. |
| feeway | The fee is | Whether the fee is taken out of the money you receive or added to the balance you repay. |
| start | Loan start date | The day the loan starts. The first payment is one month later. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| payment | Monthly payment | The level monthly payment that repays the loan over its term. |
| apr | APR | The annual percentage rate: 12 times the monthly rate at which the payments repay the cash you receive, so the fee counts as a cost. |
| cash | Cash you get | The money paid out to you: the loan amount minus a fee taken from it. |
| feeAmount | Origination fee | The fee in dollars: the fee rate times the loan amount. |
| loan | Balance you repay | The balance the payments repay: the loan amount, plus the fee when it is added to the loan. |
| interest | Total interest | All the interest paid over the term. |
| paid | Total of payments | Every monthly payment added up. |
| cost | Cost of the loan | The total of payments minus the cash you get: the interest plus the fee. |
| payoff | Paid off in | The month of the last payment, when a start date is given. |

## Method

payment = L × r ÷ (1 − (1 + r)^−n), with L the balance you repay, r the rate ÷ 12, and n the months; the APR is 12 × j, where j is the monthly rate at which n payments repay the cash you receive.

## Assumptions

- The rate is fixed and interest is charged monthly at the rate ÷ 12 on the balance.
- The fee is a percentage of the loan amount, taken from the money you receive or added to the balance.
- Payments are made at the end of each month, starting one month after the start date.
- The APR follows the actuarial method of Regulation Z (12 CFR 1026.22), with the fee as a prepaid finance charge.
- Values are not rounded to the cent between months; only the display is rounded.

## Worked examples

1. amount = $25,000.00, rate = 11%, term = 60, fee = 3%, feeway = deduct gives payment = $543.56, cash = $24,250.00, apr = 12.34%, cost = $8,363.63, feeAmount = $750.00. Source: Regulation Z, 12 CFR 1026.22, Determination of annual percentage rate, https://www.consumerfinance.gov/rules-policy/regulations/1026/22/.
2. amount = $25,000.00, rate = 11%, term = 60, fee = 3%, feeway = add gives payment = $559.87, loan = $25,750.00, cash = $25,000.00, apr = 12.3%, interest = $7,842.04. Source: Regulation Z, 12 CFR 1026.22, Determination of annual percentage rate, https://www.consumerfinance.gov/rules-policy/regulations/1026/22/.
3. amount = $10,000.00, rate = 9.5%, term = 84, fee = 0%, feeway = deduct, start = 2026-11-01 gives payment = $163.44, apr = 9.5%, interest = $3,728.94, payoff = 2033-11-01. Source: Regulation Z, 12 CFR 1026.22, Determination of annual percentage rate, https://www.consumerfinance.gov/rules-policy/regulations/1026/22/.

## FAQ

### How is a home improvement loan payment calculated?

It is the fixed-rate loan formula: L × r ÷ (1 − (1 + r)^−n), where L is the balance, r is the yearly rate ÷ 12, and n is the months. $25,000 at 11% over 60 months is $543.56 a month.

### What does an origination fee do to the cost?

A 3% fee on $25,000 is $750. Taken from the loan, you receive $24,250 but repay $25,000, so the APR rises from 11% to 12.34%. Compare offers by APR, because it counts the fee.

### Should the fee be taken out or added to the loan?

Added to the loan, you get the full $25,000 but pay interest on $25,750, so the payment is $559.87 instead of $543.56. Use the switch to compare the two.

### What kind of loan should I use for home improvements?

HUD says the best kind depends mainly on how much you need to borrow, and it calls paying cash the thriftiest way. If your home equity is limited, it points to an FHA Title I Property Improvement Loan.

### Is a home equity loan different?

A home equity loan uses your home as collateral, and the CFPB warns that the lender could foreclose if you cannot pay it back. This page works out the payment for any fixed-rate loan, but read the terms of what you are offered.

### Why does this page not show current rates?

Rates depend on your credit and your lender, so you type the rate you were quoted.

## Sources

- U.S. Department of Housing and Urban Development, Fixing Up Your Home and How to Finance It. Retrieved 2026-11-01. https://www.hud.gov/hud-partners/single-family-fixing-home
- Regulation Z (Truth in Lending), 12 CFR 1026.22, Determination of annual percentage rate. Retrieved 2026-11-01. https://www.consumerfinance.gov/rules-policy/regulations/1026/22/
- Regulation Z, 12 CFR 1026 appendix J, Annual percentage rate computations for closed-end credit transactions (actuarial method). Retrieved 2026-11-01. https://www.consumerfinance.gov/rules-policy/regulations/1026/j/
- Consumer Financial Protection Bureau, What is a home equity loan? (the home is collateral; the lender could foreclose if you cannot pay). Retrieved 2026-11-01. https://www.consumerfinance.gov/ask-cfpb/what-is-a-home-equity-loan-en-106/