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Lease Calculator

Find the monthly payment on a lease from the interest rate, or the effective rate from a known payment — with residual value, totals, and a principal-vs-interest split.

Enter the interest rate to get the monthly lease payment.

ExampleSample values — edit any field to see your result.

$

What the leased item is worth today (capitalized cost / property value).

$

Estimated value at the end of the lease (salvage / balloon). You pay the drop from asset to residual, plus interest.

years
months
%

Nominal annual rate. Monthly rate is this ÷ 12 (not a money factor — use Auto Lease for that).

Results update as you type.

Monthly Pay

$405.06

Estimated result

Number of payments
36
Total of monthly payments
$14,582.28
Total Interest
$2,582.28

Principal vs interest

Principal 82%, Interest 18%
  • Principal82%
  • Interest18%
Monthly Pay$405.06

Find the monthly payment on a lease when you know the rate, or the effective interest rate when you know the payment. Enter the asset value, residual (end-of-term) value, and term. Totals and a principal-versus-interest split are included. For a U.S. car lease with a money factor and sales tax, use the Auto Lease Calculator instead.

Formula

A lease with a residual is priced like a balloon loan. Monthly rate r is the annual rate ÷ 12; n is years × 12 + extra months. The payment amortizes today's value minus the discounted residual:

r   = APR% / 1200
PMT = (asset − residual × (1 + r)^(−n)) × r / (1 − (1 + r)^(−n))

At 0% that simplifies to (asset − residual) / n. Fixed Payment inverts the same identity and solves for r (then APR = r × 12). Total of payments is the unrounded PMT × n, rounded to cents; total interest is that total minus (asset − residual).

The default $20,000 asset, $8,000 residual, 3-year term, and 6% rate is $405.06 a month — $14,582.28 over 36 payments, of which $2,582.28 is interest. Drop the payment to $400 and the effective rate is 5.581%.

Default $20,000 · $8,000 residual · 3 years

Input / resultAmount
Asset value$20,000
Residual value$8,000
Term36 months
Interest rate6%
Monthly pay$405.06
Total of 36 payments$14,582.28
Total interest$2,582.28

Examples

Known rate, solve the payment

A copier worth $20,000 will be worth $8,000 after a 3-year lease at 6%. The present value of that $8,000 residual is about $6,685, so you finance roughly $13,315. The level payment is $405.06 a month. Over 36 months you pay $14,582.28; $12,000 is depreciation (principal) and $2,582.28 is interest.

Known payment, solve the rate

The same copier at $400 a month (still $20,000 / $8,000 / 36 months) implies an effective rate of 5.581%. Totals are $14,400 of payments and $2,400 of interest — a slightly cheaper money cost than the 6% quote.

Frequently asked questions

How is a lease payment calculated?
A residual-value lease is a balloon loan. The monthly payment amortizes the gap between today's asset value and the present value of the residual at the monthly rate (annual rate ÷ 12). At 0% that is simply (asset − residual) ÷ months. You do not build equity in the asset unless the contract lets you buy it at the residual when the term ends.
What is residual value?
Residual value (sometimes salvage value) is what the asset is expected to be worth at the end of the lease — the balloon you would pay to buy it, or what the lessor can sell it for. A $20,000 item leased for 3 years with an $8,000 residual means you finance $12,000 of depreciation plus interest. Longer terms usually mean a lower residual, except for some real estate that can appreciate.
What is the difference between a lease and rent?
A lease is the contract; rent is the periodic payment. In neither case do you own the asset while you are only leasing or renting it. This calculator prices equipment, property, and other residual-value leases. For a U.S. car lease with a money factor, down payment, trade-in, and sales tax, use the Auto Lease Calculator.
What does the Fixed Payment tab do?
It works backward from a known monthly payment to the effective interest/return rate — the RATE that makes the present value of the payments plus residual equal the asset. If the payments plus residual cannot cover the asset even at 0%, the implied rate would be negative and the calculator says so.
How is this different from an auto lease?
Auto leases usually quote a money factor (APR ÷ 2400), add sales tax on depreciation plus rent, and often include drive-off costs. This tool is the general case: a level monthly payment on asset, residual, term, and an annual interest rate. Use Auto Lease for a U.S. car quote; use this one for equipment, furniture, software, or a simple property lease.

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