Amortization Calculator
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Generate your complete loan amortization schedule — every payment broken down into principal and interest, with running balance.
Monthly Payment
$0
📊 Show Full Amortization Schedule
| Month | Payment | Principal | Interest | Balance |
|---|
📐 Formula
Monthly Payment = P × [r(1+r)^n] / [(1+r)^n − 1]. Monthly Interest = Remaining Balance × Monthly Rate. Monthly Principal = Payment − Interest
How to Use the Amortization Calculator
Enter loan details
Input the loan amount, annual interest rate, and term in months. A 30-year mortgage = 360 months; a 5-year car loan = 60 months.
Add an extra payment
Enter any additional monthly principal payment. Even $100/month extra on a 30-year mortgage saves thousands in interest and shortens the loan by years.
Review the schedule
Each row shows the payment number, total payment, interest portion, principal portion, and remaining balance — the most transparent view of any loan's true cost.
How Amortization Works: Why Early Payments Are Mostly Interest
Each loan payment covers the interest that has accrued since the last payment, with the remainder reducing the principal. Because the balance starts large, early payments are heavily weighted toward interest — on a 30-year mortgage, the first payment might be 85% interest and only 15% principal. As the balance shrinks, less interest accrues and more of each payment reduces principal. This creates the characteristic accelerating paydown curve: the final years of a 30-year mortgage see dramatic principal reduction per payment compared to the first years.
The Power of Extra Principal Payments
Extra principal payments in the early years of a loan have an outsized impact because they eliminate future interest charges that would otherwise compound over years. An extra $200/month on a $300,000, 30-year, 7% mortgage made from month 1 shortens the loan by approximately 7 years and saves over $100,000 in interest. The same $200/month added in year 20 saves considerably less. The mathematical benefit of extra payments is greatest at the start — making early principal reduction one of the highest guaranteed-return actions available.
Reading an Amortization Table for Refinancing Decisions
When refinancing, the amortization schedule reveals why refinancing in the later years of a loan often makes less sense. If you have 10 years remaining on a 30-year mortgage, you are now mostly paying principal — your interest burden is already low. Refinancing resets the amortization clock, front-loading interest again even if the new rate is lower. The breakeven analysis for any refinance should compare total interest paid on the existing schedule against total interest on the new schedule, not just the monthly payment difference.
How to Build an Amortization Schedule by Hand: Worked Example
Take a $300,000 loan at 6% APR over 30 years. The monthly rate is 0.06 ÷ 12 = 0.005, and the fixed payment from M = P × [r(1+r)ⁿ] ÷ [(1+r)ⁿ − 1] is $1,798.65.
Month 1: interest = balance × monthly rate = $300,000 × 0.005 = $1,500.00. Principal = payment − interest = $1,798.65 − $1,500.00 = $298.65. New balance = $300,000 − $298.65 = $299,701.35.
Month 2: interest = $299,701.35 × 0.005 = $1,498.51. Principal = $1,798.65 − $1,498.51 = $300.14. Notice principal grew by $1.49 in a single month — that shift is the entire mechanism of amortization. Every payment, the interest is computed on a slightly smaller balance, so a slightly larger share becomes principal, and the process compounds through all 360 months.
Repeated for the full term, total interest paid over 30 years comes to roughly $347,515 — more than the original loan amount — with the crossover point (where principal finally exceeds interest in the payment) not arriving until close to year 21.
Why Do Early Payments Feel Like They Barely Touch the Balance?
What is the actual split in the first year?
On the loan above, the first twelve payments total $21,583.80, of which only about $1,833 is principal — roughly 8.5%. The remaining 91.5% is interest. This is not a lender trick; it is the mathematical consequence of applying a fixed rate to a large, slowly shrinking balance. It is also exactly why refinancing resets the clock: a refinance restarts the schedule at month 1, re-entering the high-interest, low-principal phase even at a better rate.
What does one extra principal payment early on actually save?
Adding $300 directly to principal in month 1 eliminates that dollar-for-dollar from the balance immediately, and every future month's interest is computed on the smaller figure. Because it strikes at the point in the schedule where the balance (and therefore future interest) is largest, an extra payment made in year 1 saves more lifetime interest than the same extra payment made in year 20 — the schedule's own math rewards paying down debt as early as possible.
How is a schedule useful when refinancing?
Before refinancing, compare your current schedule's remaining interest (not the original total) against the new loan's projected interest plus closing costs. A loan already 12 years into a 30-year term has a smaller remaining-interest number than a fresh amortization suggests, which is the detail most refinance calculators skip.
Frequently Asked Questions
Sources & Methodology
Calculations are based on the most current publicly available data from authoritative government and industry sources: