Amortization Calculator
Enter a loan amount, term, and interest rate to calculate your payment and see how the balance, interest, and principal change over time. Add an optional extra monthly payment to explore a faster payoff.
Enter your loan details
%
Monthly Payment: $1,687.71
| Total of 180 monthly payments | $303,788.46 |
| Total interest | $103,788.46 |
Payment breakdown
Principal 65.8% · Interest 34.2%
Balance, Interest & Payment over time
| Year | Interest | Principal | Ending balance |
|---|---|---|---|
| 1 | $11,769.23 | $8,483.33 | $191,516.67 |
| 2 | $11,246.00 | $9,006.57 | $182,510.10 |
| 3 | $10,690.49 | $9,562.07 | $172,948.02 |
| 4 | $10,100.72 | $10,151.84 | $162,796.18 |
| 5 | $9,474.58 | $10,777.98 | $152,018.20 |
| 6 | $8,809.82 | $11,442.75 | $140,575.45 |
| 7 | $8,104.05 | $12,148.51 | $128,426.94 |
| 8 | $7,354.76 | $12,897.80 | $115,529.13 |
| 9 | $6,559.25 | $13,693.31 | $101,835.82 |
| 10 | $5,714.68 | $14,537.89 | $87,297.94 |
| 11 | $4,818.01 | $15,434.55 | $71,863.38 |
| 12 | $3,866.04 | $16,386.52 | $55,476.86 |
| 13 | $2,855.36 | $17,397.21 | $38,079.66 |
| 14 | $1,782.34 | $18,470.23 | $19,609.43 |
| 15 | $643.13 | $19,609.43 | $0.00 |
What this Amortization Calculator does
This calculator shows how a fixed-rate installment loan is repaid over time. Each regular payment is split between interest (the cost of borrowing) and principal (the amount you still owe). In the early months, interest takes a larger share because it’s computed on a higher balance. As the balance falls, more of each payment goes to principal, and the payoff accelerates.
The payment is based on the standard formula for a present value paid down by equal periodic payments. If P is the loan amount, i is the periodic rate (APR ÷ 12 for monthly payments), and n is the total number of months, the payment is:
Payment = P × i / (1 − (1 + i)−n) (when i = 0, Payment = P ÷ n)
Use the schedule to see the interest and principal for each period and the remaining balance after every payment. The totals summarize the dollar amount you’ll pay over the life of the loan and how much of that is interest.
- Small rate changes matter. A one-point difference in APR can add or remove thousands in interest on longer terms.
- Term length drives total interest. Shorter terms mean higher payments but a much lower interest cost.
- Extra monthly payments reduce the balance faster and shorten the term. In this tool, the extra is applied directly to principal after the regular payment.
Notes: This tool covers principal and interest only. It doesn’t model taxes, insurance, escrow, HOA dues, late fees, or prepayment penalties. Calculations are estimates and for education.
Amortization FAQ
What is loan amortization?
Amortization is the process of paying down a loan with regular payments. Each payment covers that period’s interest first, and the remainder reduces the principal. Over time, interest shrinks and principal paid increases.
How do I calculate a monthly mortgage payment?
Use the standard PMT formula: payment = r × P ÷ (1 − (1 + r)−n), where P is principal, r is the monthly rate (APR/12), and n is the number of payments. This calculator applies that formula and builds the full schedule automatically.
What’s the difference between principal and interest?
Principal is the amount you borrowed. Interest is the lender’s charge for using that money. Early in the loan most of your payment goes to interest; later, more goes to principal.
Do extra payments really save interest?
Yes. Any extra amount directly lowers principal, so future interest is charged on a smaller balance. Even small recurring extras or a single lump sum can shorten the term and reduce total interest.
What’s the benefit of biweekly payments?
Paying half the monthly amount every two weeks creates 26 half-payments per year (≈13 full payments), effectively one extra monthly payment annually—usually shaving years off a 30-year loan.
Does the schedule include taxes, insurance, or PMI?
No—amortization covers principal and interest only. Escrows like property taxes, homeowner’s insurance, HOA dues, and PMI are separate and may appear on your monthly statement but aren’t part of amortization math.
What’s the difference between APR and interest rate?
The interest rate is the cost of borrowing before fees. APR tries to include certain lender fees to reflect the overall cost. Amortization typically uses the nominal interest rate for the payment formula.
Can I refinance to lower my payment?
Possibly. A lower APR and/or longer term can reduce monthly payment, but consider closing costs and the total interest across the new term. Use a refinance calculator to compare scenarios and break-even time.
Use cases & examples
Example 1: Baseline 30-year fixed
Scenario: $350,000 loan, 30 years, 6.25% APR.
What happens: The calculator computes the fixed monthly payment using the PMT formula and builds an amortization table. Early payments are interest-heavy; by the middle of the term, principal reduction overtakes interest.
Why it matters: Seeing the split helps budget and reveals how much total interest you’ll pay if you don’t accelerate payoff.
Example 2: Add $150/month extra
Scenario: Same loan as above, plus a recurring $150 extra principal each month.
What happens: Extra dollars go straight to principal. The payoff date moves forward and total interest drops—often by tens of thousands over a 30-year horizon (exact savings depend on rate and balance).
Why it matters: Small, steady extras can have a larger cumulative effect than an occasional lump sum late in the term.
Example 3: Biweekly cadence
Scenario: Switch to 26 half-payments per year (≈13 full months).
What happens: The effective annual payment increases slightly, reducing principal faster and shortening the term (commonly by ~4–6 years on a fresh 30-year loan, rate-dependent).
Why it matters: If you’re paid every two weeks, this is a “set-and-forget” acceleration that mimics one extra payment per year.