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Lease Calculator

Use this lease calculator to estimate the monthly payment on a lease, or the effective interest rate if you already know the payment. Enter the asset value, residual value, lease term, and interest rate to see the monthly payment, total of payments, and total interest.

Primary answer
Estimated monthly payment
Inputs to verify
Adjusted capitalized cost, Residual value, and Lease term
Use type
Use as an estimate that depends on assumptions.
Keyword intent
lease calculator

Calculator

Lease Calculator

Calculates estimated monthly payment from adjusted capitalized cost, residual value, lease term. Defaults are filled in so you can review a working example before changing inputs.

USD

Amount being capitalized after reductions. Use the value from the lease quote when available.

USD

Estimated value at lease end from the lease quote.

months

Whole number of monthly payments.

Decimal factor used to estimate the rent charge.

%

Enter 0 if tax is handled upfront or outside the monthly payment.

Result

Result reflects the current submitted inputs.

  • Risk B
  • Reviewed 2026-05-26
  • 2 sources
Estimated monthly payment630.84 USD
Base monthly payment600.8 USD
Monthly depreciation500 USD
Monthly rent charge100.8 USD
Modeled monthly tax30.04 USD
Total modeled monthly payments15,140.16 USD

Breakdown

Monthly depreciation
500 USD
Monthly rent charge
100.8 USD
Modeled monthly tax
30.04 USD
  • This is a simplified lease scenario calculator using user-entered values.
  • The model assumes monthly payments and a money-factor rent charge.
  • Sales tax is modeled only as a percent of base monthly payment; actual tax and disclosure rules vary.
  • Upfront charges, end-of-lease charges, mileage charges, insurance, and jurisdiction-specific disclosures are excluded unless represented in the user-entered values.
  • This is an educational estimate, not financial advice, a lessor quote, or a legal lease disclosure.

Accuracy notes

Risk level
B
Reviewed
2026-05-26
Sources
2
Primary result
Estimated monthly payment

Formula logic is kept in a pure calculator module with fixtures, source notes, and page-visible assumptions.

Categories

What the result means

The monthly payment is what you pay each period; the total of payments is the full cash outlay over the lease; total interest is the finance cost on top of the depreciation. Because a lease only pays for the value you use (asset value minus residual), payments are usually lower than a loan for the same asset, but you do not own it at the end unless you pay the residual to buy it out.

Estimated monthly paymentBase monthly lease payment plus modeled monthly tax.
Base monthly paymentDepreciation charge plus rent charge before modeled tax.
Monthly depreciationAdjusted capitalized cost minus residual value, divided by term.
Monthly rent chargeAdjusted capitalized cost plus residual value, multiplied by money factor.

Use the result this way

  1. Start with Estimated monthly payment, then use supporting outputs for context.
  2. Verify Adjusted capitalized cost, Residual value, and Lease term before copying the result.
  3. Check the formula, example, and assumptions before reusing the answer.

User job

How to use this calculator

Use Lease Calculator when you need estimated monthly payment, then use base monthly payment and monthly depreciation to check the context for planning conversations, quote comparisons, payment checks, and scenario review.

Best for

  • Comparing one financial scenario with another
  • Preparing questions for a lender, advisor, or statement review
  • Reviewing a default example before entering your own adjusted capitalized cost and residual value.

Check before relying

  • Verify rates, fees, timing, taxes, and local rules against official documents before acting.
  • This is a simplified lease scenario calculator using user-entered values.
  • The model assumes monthly payments and a money-factor rent charge.
  • Source context: Federal Trade Commission, reviewed 2026-06-16.

Next useful step

  • Auto Lease CalculatorUse next when your task shifts from Lease Calculator to Auto Lease Calculator.
  • Auto Loan CalculatorUse next when your task shifts from Lease Calculator to Auto Loan Calculator.
  • Loan CalculatorUse next when your task shifts from Lease Calculator to Loan Calculator.

Formula

A lease payment covers the depreciation of the asset over the lease term plus a finance charge. Monthly payment = depreciation + finance charge, where depreciation = (asset value - residual value) / term in months, and the finance charge is interest applied to the financed amount. The total of payments is the monthly payment times the number of months, and total interest is the total of payments minus the depreciation paid for.

  • A lease has two cost parts: depreciation (asset value minus residual value, spread over the term) and the finance charge (interest on the money tied up). Both are built into every monthly payment.
  • Residual value is the asset's expected worth at lease end. A higher residual means less depreciation to finance, so a lower monthly payment. It is set in the contract, not chosen by you.
  • Lease vs. loan: a lease finances only the depreciation, so payments are lower, but you return the asset at the end (or buy it for the residual). A loan finances the full price and you own the asset outright.
  • Lease vs. rent: a lease is a fixed-term contract (often 12 months or longer) with set payments; rent is usually shorter and more flexible. Leases are common for cars, equipment, and commercial space.
  • For car leases, the interest portion is often quoted as a money factor; multiply the money factor by 2400 to get the approximate equivalent annual percentage rate.

Inputs

Enter the asset (capitalized) value, the residual value the asset is worth at lease end, the lease term in months, and the annual interest rate. The calculator splits each payment into depreciation (the value you use up) and interest (the finance cost), then returns the monthly payment, the total of all payments, and the total interest. A higher residual value lowers the monthly payment because you finance less depreciation.

Adjusted capitalized costAmount being capitalized after reductions. Use the value from the lease quote when available.
Residual valueEstimated value at lease end from the lease quote.
Lease termWhole number of monthly payments.
Money factorDecimal factor used to estimate the rent charge.
Sales tax on monthly paymentEnter 0 if tax is handled upfront or outside the monthly payment.

Example

Leasing a $30,000 asset with an $18,000 residual over 36 months at 6% means you finance $12,000 of depreciation plus interest. The monthly payment works out to about $405, a total of roughly $14,582 over the term, of which about $2,582 is interest. Raising the residual to $20,000 would lower the payment because less value is used up.

FAQ

What is a lease?

A lease is a contract where the owner (lessor) lets another party (lessee) use an asset for a set term in return for regular payments. Cars, equipment, and property are commonly leased; at the end you return the asset or buy it for its residual value.

How is a lease payment calculated?

A lease payment covers depreciation plus a finance charge. Depreciation is (asset value - residual value) divided by the term in months; the finance charge is interest on the financed amount. The calculator adds them to give the monthly payment.

What is the difference between leasing and buying?

Leasing finances only the depreciation, so monthly payments are lower, but you return the asset at lease end (or pay the residual to keep it). Buying finances the full price and you own the asset outright once the loan is paid.

What is residual value in a lease?

Residual value is what the asset is expected to be worth at the end of the lease. A higher residual means you finance less depreciation, which lowers the monthly payment. It is set in the lease contract.

Is leasing cheaper than a loan?

Monthly lease payments are usually lower than loan payments for the same asset, because a lease only pays for the depreciation, not the full price. Over the long term, repeatedly leasing can cost more than buying and keeping an asset, since you never build ownership.

What is a money factor?

A money factor is how the interest rate is expressed on a car lease. Multiply it by 2400 to get the approximate annual percentage rate. For example, a money factor of 0.0025 is roughly 6% APR.

Sources

Last reviewed: 2026-05-26

  • officialReviewed 2026-06-16
    Buying or Leasing a CarFederal Trade Commission. Consumer guidance on lease terms, residual value, and comparing leasing with buying.
  • officialReviewed 2026-06-16
    Consumer Leasing Act and Regulation MConsumer Financial Protection Bureau. Disclosure rules for consumer leases, including how lease costs and terms are presented.

Disclaimer

Results are estimates based on the values you enter and a standard lease structure. Actual lease offers may include fees, taxes, down payments, mileage limits, and different residual or money-factor terms. Review the full lease agreement before signing.