Amortization Calculator
Generate a detailed loan payment schedule showing how each payment is split between principal and interest over the life of your loan.
Loan Details
What Is Amortization?
Amortization is the process of spreading a loan into a series of fixed payments over time. Each payment covers both the interest cost and a portion of the principal balance. Early in the loan, most of your payment goes toward interest. Over time, the balance shifts heavily toward reducing principal.
This calculator generates a complete breakdown so you can see exactly where your money goes each month and plan strategies to pay off your loan faster with extra payments.
How to Use This Calculator
Get the most out of your amortization schedule with these tips:
- Loan Amount: Enter the total amount borrowed (the principal). For mortgages, this is the home price minus your down payment.
- Interest Rate: Enter the annual percentage rate (APR). Check your loan offer or statement for the exact rate.
- Loan Term: Common terms are 15 or 30 years for mortgages, 3-7 years for auto loans, and 1-5 years for personal loans.
- Extra Payment: Adding even a small extra monthly payment can dramatically reduce your total interest and shorten the loan term.
The Amortization Formula
The fixed monthly payment is calculated using the annuity payment formula:
Practical Example
Consider a $300,000 mortgage at 6.5% interest over 30 years. The monthly payment would be approximately $1,896.
Over the full 30 years, you'd pay a total of $682,633 — meaning $382,633 in interest alone. That's more than the original loan amount!
However, if you add just $200/month extra, you'd pay off the loan in about 23 years and save over $105,000 in interest. Small extra payments make a massive difference.
Amortization FAQ
Why does so much of my early payment go to interest?
+Interest is calculated on the outstanding balance. At the start of a loan, your balance is at its highest, so the interest portion of each payment is larger. As you pay down the principal, the interest decreases and more goes toward the balance.
How do extra payments help?
+Extra payments go directly toward reducing your principal. A smaller principal means less interest accrues next month, which creates a snowball effect. Even $50-100/month extra can save tens of thousands in interest over a long mortgage.
What's the difference between APR and interest rate?
+The interest rate is the cost of borrowing the principal. APR (Annual Percentage Rate) includes the interest rate plus other fees like origination charges and mortgage insurance, giving a more complete picture of the loan's cost.
Should I choose a 15-year or 30-year mortgage?
+A 15-year mortgage has higher monthly payments but saves significantly on total interest (often 50%+ less). A 30-year mortgage offers lower monthly payments and more flexibility. Use this calculator to compare both scenarios side by side.
Does amortization apply to all loans?
+Most fixed-rate loans use amortization, including mortgages, auto loans, and personal loans. However, some loans (like interest-only loans or revolving credit) work differently. This calculator is designed for standard amortizing loans.