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Boat Loan Calculator

Work out the monthly payment on a boat loan once the down payment, trade-in, sales tax and fees are counted, and see what the boat costs in total by the time it is paid off.

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How to use the boat loan calculator

  1. Enter the boat price you agreed, including the motor and trailer if they are part of the deal.
  2. Enter your down payment and any trade-in value.
  3. Enter the sales tax rate and any title, registration and other fees.
  4. Tick whether the trade-in lowers the taxable price (it does in most US states) and whether the tax and fees go into the loan.
  5. Enter the interest rate and the loan term in years.
  6. Read the monthly payment, the amount financed, the total interest and the total cost.

How the payment is calculated

Sales tax T = tax rate × (price − trade-in) or tax rate × price Amount financed P = price − down payment − trade-in + T + fees Monthly payment M = P × i ÷ (1 − (1 + i)^−n) i = annual rate ÷ 12, n = years × 12

If you pay the tax and fees in cash, they drop out of the amount financed and are added to the cash you need at purchase instead. The payment uses standard amortization: interest is charged monthly on the remaining balance and the payment stays fixed.

Worked example

The defaults are a $45,000 boat with $9,000 down (20%), no trade-in, 6% sales tax, $800 of fees, at 8.5% for 15 years:

  • Sales tax: 6% × $45,000 = $2,700
  • Amount financed: 45,000 − 9,000 + 2,700 + 800 = $39,500
  • Monthly rate: 0.085 ÷ 12 = 0.0070833, and n = 180
  • (1.0070833)^180 = 3.56265
  • Payment: 39,500 × 0.0070833 × 3.56265 ÷ 2.56265 = $388.97
  • 180 payments total $70,014.98, so the interest is $30,514.98
  • Total cost: $9,000 down + $70,014.98 = $79,014.98

With a $5,000 trade-in, the taxable price drops to $40,000, the tax to $2,400, and the amount financed to $34,200, for a payment of $336.78. If your state taxes the full price, the payment is $339.74.

How the term changes the cost

The same $39,500 financed at 8.5%:

Term Monthly payment Total interest
10 years $489.74 $19,269.22
15 years $388.97 $30,514.98
20 years $342.79 $42,769.64

Lenders offer long terms on boats because the loans are large, but a 20-year loan means paying interest on a boat that may be worth a fraction of its price by then. Going from 15 to 20 years saves about $46 a month and adds over $12,000 of interest. A bigger down payment protects you from owing more than the boat is worth if you sell early.

Costs the payment leaves out

Owning a boat costs much more than the loan. Budget for insurance (lenders require it), storage or a slip, winterizing, maintenance, fuel, and registration renewals. Some owners budget around 10% of the boat's value a year for running costs as a rough starting point; the real figure depends heavily on size, age and use. Lenders may also ask for a marine survey on a used boat, which you usually pay for.

Frequently asked questions

How long can a boat loan be?

Terms of 10 to 15 years are common, and some lenders go to 20 years for larger loans on newer boats. Smaller loans and older boats usually get shorter terms. The longer the term, the lower the payment but the more interest you pay.

How much should I put down on a boat?

Ten to 20% is typical, and many lenders ask for at least 10%. A larger down payment lowers the payment and the interest, and it can help you get a better rate. It also reduces the risk of owing more than the boat is worth.

Is boat loan interest tax-deductible?

Sometimes. In the US, a boat with sleeping, cooking and toilet facilities can count as a second home, so interest on a loan secured by it may be deductible as home mortgage interest, within the IRS limits. See IRS Publication 936 and check with a tax professional.

Does the trade-in reduce sales tax?

In most US states, yes: you pay tax only on the price minus the trade-in. A few states tax the full price. Untick the trade-in box if yours does, and check your state's rules for boats, which can differ from those for cars.

Related calculators

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  • Amortization Calculator — Loan amortization schedule by year, with the payoff date and what an extra monthly payment saves.

Results are estimates for educational purposes and are not financial, tax or legal advice. See our disclaimer.