Two borrowers can take the same loan, at the same rate, for the same term, and pay wildly different amounts of interest — because the repayment system decides how fast the balance falls, and interest is charged on the balance. The French system (a fixed monthly payment, the standard mortgage in most countries) pays slowly at first. The German system (a fixed amount of principal each month, so the payment falls) attacks the balance from day one. Interest-only does not attack it at all. This calculator puts all three on one screen for one loan: first payment, last payment, total interest, total paid.
The three systems in one paragraph each
French — fixed payment: the payment never changes; each month it covers that month’s interest plus whatever principal is left over, so the principal share starts tiny and grows. Comfortable and predictable, and the slowest balance reduction of the two amortising systems. German — fixed principal: you repay the same slice of the loan every month (the loan divided by the number of months) plus interest on what is still owed, so the payment starts at its highest and falls every single month. Interest-only: the payment covers only the interest; the balance on the last day is the balance on the first day, and the whole loan falls due at the end.
The same 200,000, three ways
At 5% over 20 years, the French payment is a flat 1,319.91 and the interest totals 116,778.75. The German system starts at 1,666.67, ends at 836.81 — and its interest totals 100,416.67, which is 16,362.09 less, because the balance is being cut by a full 833.33 of principal from the very first month. Interest-only charges just 833.33 a month and feels cheapest of all — until you notice the interest totals 200,000.00, exactly the loan itself, and the 200,000 is still owed in full when the term ends: total cash out 400,000, the worst of the three by a distance.
What the table cannot show: rate changes and overpayments
This comparison holds the rate fixed for the whole term, which is exactly how a fixed-rate loan behaves and not how a variable-rate one does. When the rate is reviewed, all three payments are recalculated, and the systems diverge in a new direction: the German borrower, having cut the balance faster, has less principal exposed to the higher rate. The same logic is why early overpayments punch above their size in the French system — in the first years, when the balance is at its peak, an extra payment removes principal that would otherwise have been charged interest twenty times over. If your loan allows penalty-free overpayments, the comparison above quietly understates what a French loan can become in disciplined hands. Run it once with your real figures before you sign anything, and keep the screenshot: it is the cheapest second opinion in the whole purchase.
Why banks default to French, and when German wins
The French system qualifies more borrowers: the payment is lower at the start, when incomes are usually at their lowest relative to the loan, and it never surprises. The German system is cheaper in total but front-loads the pain — you must afford 1,666.67 now to save 16,361.40 across twenty years — and in many markets it is simply not offered on mortgages, or only on request. There is a third way to get most of the German effect inside a French loan: overpay the principal early, when the balance (and therefore every month’s interest) is at its largest. Run this comparison before you sign, and if your lender offers a choice, let the total-interest column — not the first payment — make it.
Related tools
Versión en español: Comparador de Sistemas de Amortización: Francés vs Alemán vs Solo Intereses, Cuota a Cuota · Mortgage Affordability (Borrowing Cap) Calculator.
Embed this tool on your website — free
Copy the code below to add this working tool to your own page. A small credit link stays with it — that’s all we ask.