Skip to content
CalcSpectrum

Lease Calculator

Calculate your monthly lease payment and residual buy-out value for a property or equipment lease, based on asset value, term, interest rate, and residual percentage.

Free to use · Instant results

Calculator Inputs

Sets the currency this calculator's numbers are denominated in. This is presentation only — it does NOT convert your numbers between currencies, it only changes how they're formatted.

The property or equipment's total value being leased.

How many years (and months) the lease runs for. Payments are monthly.

Additional months (0-11). For 18 months, enter 1 year 6 months.

The nominal annual interest rate the lease charges (e.g. 6 for 6%).

What percentage of the asset's value remains as the residual/buy-out price at the end of the lease.

Monthly Lease Payment
$486.08
Residual / Buy-Out Value
$9,600.00
Your spreadsheet is generated in your browser.

About these results

CalcSpectrum calculators produce automated estimates using established formulas and the specific values you enter. Because real-world outcomes depend on input accuracy, mathematical assumptions, and rounding conventions, please verify critical figures with an appropriately qualified financial, tax, medical, legal, or other professional, as relevant.

Financial Notice: These figures are informational estimates for personal planning only. They do not constitute financial, investment, tax, or legal advice, nor do they represent a lending offer or credit approval. Provider and financial institution figures, rates, fees, and underwriting requirements may differ.

How It's Calculated

Formula

Residual=Asset Value×Residual %100,Payment=(Asset Value−Residual(1+r)n)×r×(1+r)n(1+r)n−1\text{Residual} = \text{Asset Value} \times \frac{\text{Residual \%}}{100}, \quad \text{Payment} = \dfrac{\left(\text{Asset Value} - \dfrac{\text{Residual}}{(1+r)^n}\right) \times r \times (1 + r)^n}{(1 + r)^n - 1}

This calculator estimates a fixed monthly payment for a generic property or equipment lease with a residual (buy-out) value at the end of the term. The residual value is computed as a percentage of the asset's valuation, then treated as a balloon payment due at the end of the lease — the amount actually financed is the asset value minus the present value of that residual, amortized over the term at the lease's nominal annual interest rate. This is a generic, deterministic model: it does not represent a specific lessor's underwriting, taxes, fees, or early-termination terms. For automotive leases specifically (which typically use a negotiated capitalized cost and a money factor instead of a stated interest rate), use the Auto Lease Calculator instead.

Worked Examples

$24,000 asset, 3-year term, 6% annual rate, 40% residual

  1. Residual value = 24,000 × 0.40 = $9,600
  2. Monthly periodic rate r = 0.06 / 12 = 0.005; n = 36 months
  3. Financed amount = 24,000 − 9,600 / (1.005)^36 ≈ $15,977.81
  4. Monthly payment = financed amount × r × (1+r)^36 / ((1+r)^36 − 1) ≈ $486.08

0% interest rate: $24,000 asset, 2-year term, 25% residual

  1. Residual value = 24,000 × 0.25 = $6,000
  2. At 0% interest, the payment is simply the depreciable amount spread evenly: (24,000 − 6,000) / 24 = $750/month

Frequently Asked Questions

What is 'residual value' and why do I have to enter it as a percentage?

Residual value is what the asset is worth (and what you'd pay to buy it outright) at the end of the lease. There's no way to derive it purely from the asset's value, the term, and the interest rate — it depends on how quickly the specific asset depreciates, which varies by asset type and lessor. Entering it as a percentage of the asset's value lets you model any residual policy your lessor quotes.

How is my monthly payment calculated?

The residual value is treated as a lump-sum balloon payment due at the end of the lease. The calculator works out what that balloon payment is worth today (its present value), subtracts it from the asset's value to get the amount actually being financed, and then amortizes that financed amount over the lease term at your stated interest rate — the same math used for a standard fixed-rate amortizing loan.

What happens if I set residual to 100%?

The residual equals the full asset value, so nothing is being depreciated. At 0% interest, that means nothing is financed either, and the monthly payment is $0. At a nonzero interest rate, a small payment remains — it reflects the cost of deferring payment on that value until the end of the term, not depreciation. Both are mathematically valid outcomes, not errors.

Is this the same as the Auto Lease Calculator?

No. This is a generic lease model for property or equipment, using a stated annual interest rate and a residual percentage of asset value. The Auto Lease Calculator instead models the automotive-industry convention of a negotiated capitalized cost and a money factor against a residual dollar amount — the two use different inputs and different financing math.