Leasing calculator - payment and residual value
Calculate the leasing monthly payment, accounting for the down payment and residual value. Suitable for car capital and operating lease calculations.
Calculations are based on Estonia's tax rates in force for 2026. Results are informational.
Last updated: 2026-06-03
How is the leasing payment formed?
The leasing payment is calculated on the financed amount (asset price minus down payment), accounting for the residual value paid at the end of the term. The larger the down payment and residual value, the smaller the monthly payment, but the residual value must be paid at the end of the term.
How it is calculated
Formula
financed = price − down payment. The monthly payment amortises (financed − present value of the residual) as an annuity; the residual is paid at the end.
Example
Price 20,000 €, down payment 4000 €, residual 5000 €, 4 years → financed 16,000 €.
Example: a 30,000 EUR car with 10% down and a 20% residual value
The car costs 30,000 EUR. A 10% down payment is 3,000 EUR and a 20% residual value is 6,000 EUR. The financed amount is the price minus the down payment, so 27,000 EUR. The rate is 6.5% a year and the term 5 years, or 60 months.
The monthly payments do not clear the full 27,000 EUR. They pay back only the part left over after the residual value, plus interest on the whole balance, including the residual portion that stays outstanding for the entire term. On these inputs the payment is 443.39 EUR. It can be taken apart: 410.89 EUR is an ordinary annuity payment on 21,000 EUR (27,000 − 6,000), and 32.50 EUR is the monthly interest on the 6,000 EUR residual value (6,000 × 0.065 ÷ 12).
Total payments are 60 monthly payments (about 26,603 EUR) plus the 6,000 EUR due at the end, 32,603.35 EUR altogether. Total interest is 32,603.35 − 27,000 = 5,603.35 EUR. Add the 3,000 EUR paid up front and the car costs you 35,603.35 EUR through the lease.
Residual value and down payment: four variants
In every variant the car costs 30,000 EUR, the rate is 6.5% and the term 5 years. Only the down payment or the residual value changes.
- 10% down, 0% residual: payment 528.29 EUR, total interest 4,697.16 EUR. Nothing is left to pay at the end.
- 10% down, 20% residual: payment 443.39 EUR, total interest 5,603.35 EUR, with 6,000 EUR due at the end.
- 10% down, 40% residual: payment 358.49 EUR, total interest 6,509.53 EUR, with 12,000 EUR due at the end.
- 20% down, 20% residual: financed 24,000 EUR, payment 384.69 EUR, total interest 5,081.44 EUR.
Why a larger residual value makes the lease dearer
In this example every 20 percentage points of residual value cuts the payment by 84.90 EUR but adds about 906 EUR of interest. The reason is simple: the residual portion does not shrink during the term at all, so interest is charged on it for all 60 months.
The down payment works the other way. Raising it from 10% to 20% lowers the payment by 58.70 EUR and saves 521.91 EUR of interest, because less money is borrowed from day one. A low payment with a big residual value simply moves part of the cost to the end of the term; it does not make the car cheaper.
How to read the result rows
With a lease it pays to look at three numbers together: the monthly payment, the final payment and the total interest. Choosing on the monthly payment alone can leave the residual value as a surprise at the end.
- Financed amount: the asset price minus the down payment. This is the amount interest is charged on.
- Residual value (final payment): the sum due at the end of the term on top of the monthly payments. You enter it as a percentage of the price; the euro amount appears under the field.
- Total interest: total payments minus the financed amount.
- Total payments: all monthly payments plus the residual value. This row does not include the down payment, which has to be added separately.
Edge cases and limits
At a 0% rate the financed amount minus the residual value is simply divided by the number of months. For example, a 20,000 EUR car with 20% down and a 25% residual over four years: (16,000 − 5,000) ÷ 48 = 229.17 EUR a month. There is no interest, but the 5,000 EUR final payment remains.
The down payment and residual value together should not exceed the asset price. If they cover more than 100% of it, there is nothing left for the monthly payments to amortise and the result stops making sense. No real contract is structured that way.
The calculator does not know what the car will be worth at the end of the term. If the residual value is higher than that, buying the car out may be a poor deal. What exactly happens then depends on the type of contract and its terms.
What the calculation leaves out
The calculator assumes a fixed rate. Contract fees, monthly service charges and any insurance the contract requires have to be added separately. Running costs such as the Estonian motor vehicle tax, fuel and servicing are not part of the lease payment but weigh on the budget just as much. The annual tax can be estimated with the car tax calculator and fuel costs with the fuel cost calculator.
Frequently asked questions
How is the leasing payment calculated?+
The payment is based on the financed amount (price minus down payment), accounting for the residual value at the end of the term.
What is residual value?+
It is the amount you pay at the end to buy out the asset. A higher residual value lowers the monthly payment.
Capital vs operating lease?+
At the end of a capital lease you become the owner; with an operating lease you return the asset or buy it for the residual value.