Amortization Calculator guide
See how every loan payment splits between principal and interest, year by year, and how extra principal shortens the loan. Works for mortgages, auto loans, student loans, and personal loans with a fixed rate.
What an amortization schedule shows
An amortization schedule splits each fixed payment into interest and principal. Each month, interest = remaining balance × (APR ÷ 12). Whatever is left of the payment reduces the balance. Because the balance only falls, each month's interest is a little smaller and each month's principal a little larger.
The payment itself comes from the standard formula: P × r(1 + r)^n ÷ ((1 + r)^n − 1), where r is the monthly rate and n the number of months.
Worked example: $300,000 at 6.5 percent for 30 years
Monthly payment: $1,896.20. Month 1 interest: $300,000 × 0.065 ÷ 12 = $1,625.00. Principal: $1,896.20 − $1,625.00 = $271.20. After one month, the balance is $299,728.80.
Across year one, you pay $22,754 total: $19,401 of interest and only $3,353 of principal. After 12 months you still owe $296,647. Principal does not overtake interest until payment 233, more than 19 years in. Total interest over the life of the loan is $382,633.
That front-loading is not a trick. It is simply what happens when interest is charged on a large balance that shrinks slowly.
The power of extra payments
Extra principal early in the loan has an outsized effect because it removes balance that would otherwise accrue interest for decades. Add $200 a month to the example above and the loan is paid off in 277 months, about 23 years, saving roughly $103,000 in interest.
Other strategies: one extra payment a year, often done by paying half the monthly amount every two weeks (26 half-payments equal 13 full payments), cuts a 30-year mortgage by five to six years at today's typical rates. Rounding up your payment to the next $100 helps too.
Before prepaying, make sure you have an emergency fund, are capturing any employer 401(k) match, and have no higher-interest debt. Paying off a 6.5 percent mortgage is a guaranteed 6.5 percent return; paying off a 24 percent credit card is better.
Refinancing and equity
Because early payments are interest-heavy, refinancing into a new 30-year loan restarts the schedule. A lower rate can still win, but compare total remaining interest, not just the monthly payment. Many lenders suggest a refinance makes sense when you can cut the rate by around 0.75 to 1 point and plan to stay long enough to recover closing costs.
Equity builds slowly at first. On the example loan, you own only about $3,350 more of the house after year one, plus any appreciation. That matters if you might sell within a few years, since selling costs often run 6 to 10 percent of the price.
15-year versus 30-year schedules
The same $300,000 at 6.5 percent over 15 years costs $2,613.32 a month. Month 1 still has $1,625 of interest, but $988 goes to principal, more than three times the 30-year loan's $271. Total interest falls to about $170,400, less than half the 30-year figure. In practice, 15-year rates are usually lower too, which widens the gap further.
The 30-year loan's advantage is flexibility. You can pay it like a 15-year loan when money is good and fall back to the required payment when it is not. The 15-year loan's advantage is discipline and the lower rate.
Amortization for other loans
Auto loans, personal loans, and student loans use the same math, just with shorter terms, so the front-loading is less extreme. A $30,000 car loan at 6.9 percent over 60 months starts with $172.50 of interest out of a $592.62 payment, and principal is the majority of the payment from day one.
Credit cards and home equity lines are different. They are revolving, not amortizing, so there is no fixed schedule to zero. The minimum payment often covers little more than interest, which is why balances linger for years.
Using this calculator
Enter loan amount, APR, and term to see the payment, total interest, payoff time, and a year-by-year schedule of principal, interest, and remaining balance. Put a number in the extra principal field to see how many years and dollars it saves; the schedule shortens as you type. Everything runs in your browser; it is a planning tool, not a lender quote.
How we calculate: sources
Frequently asked questions
What is an amortization schedule?
A table showing how each payment on a fixed-rate loan divides between interest and principal, and the balance left after each period. Early payments are mostly interest; later ones are mostly principal.
How is the monthly payment calculated?
Payment = P × r(1 + r)^n ÷ ((1 + r)^n − 1), where P is the loan amount, r is the APR divided by 12, and n is the number of months. $300,000 at 6.5% for 30 years is $1,896.20 a month.
How much interest will I pay on a 30-year mortgage?
On $300,000 at 6.5%, total interest is $382,633, more than the amount borrowed. The same loan over 15 years costs about $170,400 in interest.
Do extra payments go to principal?
Usually yes, if you tell the lender to apply them to principal. Many servicers otherwise hold extra money as an advance on the next payment. Check your statement after the first extra payment.
Is it better to pay extra monthly or make one extra payment a year?
Monthly extra payments save slightly more because they reduce the balance sooner. $100 extra each month and $1,200 once a year end within a few months of each other on a 30-year loan.
Can I use this for a car loan or personal loan?
Yes. Any fixed-rate, fixed-term installment loan amortizes the same way. Credit cards and HELOCs do not; they are revolving debt without a fixed schedule.
Is my loan data uploaded?
Everything runs in your browser. Nothing you enter is uploaded to a server or stored by us.
Why is most of my mortgage payment interest?
Interest is charged on the remaining balance, which is largest at the start. On a 30-year loan at 6.5 percent, principal does not exceed interest until around year 19.
How much does paying $200 extra a month save?
On a $300,000, 30-year loan at 6.5 percent, about $103,000 in interest and roughly seven years of payments.