Amortization Calculator

Generate a complete loan amortization schedule with the interest and principal split for every payment, and see how extra principal payments cut total interest and shorten the loan.

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Extra payments reduce your loan balance, potentially shortening the loan term and reducing total interest.

Please enter loan details and calculate.

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Calculation Examples

Calculation Case Result
First payment: $200,000 loan, 30 years, 6% annual Monthly: $1,199.10 | Interest: $1,000.00 | Principal: $199.10 | Balance: $199,800.90
Payment 180 (year 15) of the same loan Interest: $712.92 | Principal: $486.18 | Balance: $142,097.69
$200,000 loan at 6% (30 years) + $200/month extra principal Payoff after 252 payments (21 years) instead of 360 | Interest saved: about $79,800
Refinancing break-even: $3,000 closing costs, $150/month savings Break-even after 20 months ($3,000 ÷ $150); refinancing pays off if you stay longer than that
Mihail Doncenco
Mihail Doncenco Site Creator & Calculator Expert

Founder and developer of CalcMate. Builds and maintains every calculator on this site, focusing on formula accuracy and clear, practical results.

How to Use the Amortization Calculator

Enter the loan amount (principal), the annual interest rate and the term in years, then select the payment frequency (monthly is standard for most consumer loans). Click "Calculate" to generate the schedule. You get your fixed payment from the annuity formula \(M = P \dfrac{r(1+r)^n}{(1+r)^n - 1}\), a table with the interest portion, principal portion and remaining balance for every period, and the total interest over the life of the loan. For monthly payments, \(r\) is the annual rate divided by 12 and \(n\) is the number of years times 12.

You can also enter an extra monthly principal payment to see how much interest you save and how much sooner the loan ends. This is the most useful feature for borrowers who consider paying a loan off early.

How Does Loan Amortization Work?

Amortization repays a debt with equal periodic payments, where each payment covers the interest accrued since the last payment plus a slice of the principal. The payment stays constant, but its makeup changes every period.

Early on the balance is high, so interest dominates. Each period the interest is \(I = B \times r\), where \(B\) is the current balance and \(r\) the periodic rate. Take $200,000 at 6% over 30 years: the payment is $1,199.10. The first payment splits into $1,000.00 interest and $199.10 principal. After 60 payments (5 years) you have paid $71,946 but reduced the balance by only $13,891 to $186,108.79. At payment 180 (year 15) the split is $712.92 interest and $486.18 principal, with $142,097.69 still owed. Principal first exceeds interest at payment 223. The final payment is $1,193.14 principal and $5.97 interest.

Over the whole loan you pay $231,676.38 in interest, 16% more than the amount you borrowed. That is why extra payments in the early years have the most leverage on total cost. The calculator assumes interest accrues monthly at one-twelfth of the annual rate, the usual convention for US mortgages. Some auto and personal loans accrue interest daily, so their real schedules differ slightly.

Amortization schedule table: interest and principal breakdown per payment period

Useful Tips 💡

  • Extra principal does the most good early. On the $200,000 loan at 6%, a single $1,000 lump sum in month 12 saves about $4,620 in total interest, while the same $1,000 in month 240 saves about $816.
  • Mortgage interest helps on your tax return only if you itemize. For 2026 the standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly (IRS Rev. Proc. 2025-32), so many borrowers do not itemize. Use Form 1098 from your lender for the actual interest figure.
  • Before you pay extra, ask whether your loan has a prepayment penalty and tell the servicer to apply the extra amount to principal, not to the next installment.

📋Steps to Calculate

  1. Enter the loan principal (amount borrowed), annual interest rate and loan term in years.

  2. Select the payment frequency (monthly for standard consumer loans).

  3. Optionally enter an extra monthly principal payment to model faster payoff.

  4. Click "Calculate" to generate the full amortization schedule.

Mistakes to Avoid ⚠️

  1. Sending extra money without specifying that it goes to principal. Some servicers apply it toward the next payment, which does not shorten the loan the way principal reduction does. Extra payments into escrow have no effect on the balance.
  2. Applying this schedule to an adjustable-rate mortgage (ARM). The tool assumes a fixed rate for the whole term, so an ARM needs a new schedule at every rate reset.
  3. Treating the sum of all remaining payments as what you owe. The remaining balance in the schedule is the principal you owe now. Future interest is paid only if you keep the loan, and prepaying avoids it.
  4. Skipping a new schedule after a refinance. Refinancing restarts the amortization clock: early payments are mostly interest again, so only a fresh schedule gives a fair cost comparison.

Practical Applications📊

  1. Compare the true cost of different loan terms. A $300,000 mortgage at 6.5% costs about $170,400 in total interest over 15 years and about $382,600 over 30 years, a difference of roughly $212,000. The shorter loan has a payment of $2,613.32 versus $1,896.20, which is $717.12 more per month.

  2. Model extra payments before you commit. Adding $200 a month to a $200,000 loan at 6% over 30 years saves about $79,800 in interest and ends the loan after 252 payments (21 years) instead of 360.

  3. Evaluate a refinance. Build a schedule for the new loan, compare its remaining interest with your current schedule and weigh closing costs to find the break-even point.

  4. Plan extra payments on auto loans and personal debt. These amortize the same way as a mortgage, so the schedule shows which payments are mostly interest and when an early payoff matters most.

Questions and Answers

Can I use the amortization calculator for a car loan?

Yes, for fixed-rate auto loans that accrue interest monthly. Enter the amount financed (price minus down payment and trade-in), the rate and the term, typically 24 to 84 months. The schedule shows when your remaining balance drops below the car market value, which is when you stop being underwater. If your lender charges simple daily interest, your actual payoff can differ slightly from the schedule.

Can I use this calculator for a mortgage amortization schedule?

Yes. Enter the loan amount (purchase price minus down payment), the annual interest rate and the term, usually 15 or 30 years, and you get the principal and interest split for each of the 180 or 360 monthly payments. The tool covers principal and interest (P&I) only. Your actual monthly mortgage payment (PITI) also includes property taxes, homeowners insurance and, if applicable, mortgage insurance or HOA dues.

How do extra principal payments affect the amortization schedule?

An extra payment applied to principal lowers the balance immediately, so every later interest charge \(I = B \times r\) is smaller, and the savings compound over the rest of the term. On $200,000 at 6% over 30 years, $200 extra per month cuts total interest from $231,676 to $151,876, a saving of about $79,800, and ends the loan after 252 payments (21 years) instead of 360. The earlier you pay extra, the larger the saving.

How does an amortization schedule work mathematically?

The schedule starts with the fixed payment from the annuity formula \(M = P \dfrac{r(1+r)^n}{(1+r)^n - 1}\) and then repeats three steps for every period. Interest is \(I_t = B_{t-1} \times r\), principal repaid is \(P_t = M - I_t\), and the new balance is \(B_t = B_{t-1} - P_t\). After \(n\) periods the balance reaches zero, apart from a few cents of rounding in the last payment. For $200,000 at 6% over 360 months, \(r = 0.005\) and \(M = 1{,}199.10\).

How does the amortization schedule help with tax planning?

The interest column shows how much mortgage interest you pay each year, which matters if you itemize deductions. The home mortgage interest deduction (IRC § 163(h)) covers interest on up to $750,000 of acquisition debt for loans taken out after December 15, 2017 ($375,000 if married filing separately). The One Big Beautiful Bill Act of 2025 made that limit permanent, and from 2026 mortgage insurance premiums also count as qualified residence interest. Your actual deductible figure is on Form 1098 and depends on your situation, so confirm with a licensed tax professional.

Is this calculator useful for evaluating mortgage refinancing?

Yes. Build a schedule for the new loan, compare its remaining interest with that of your current loan and add the closing costs. The simple break-even point is \(\text{Break-even (months)} = \dfrac{\text{Closing Costs}}{\text{Monthly Payment Savings}}\). With $3,000 in closing costs and $150 saved per month, that is 20 months. Refinancing makes sense if you keep the loan longer than that. Extending the term can lower the payment but raise total interest, so compare total cost, not only the monthly payment.

What is an amortization schedule and what does it show?

An amortization schedule is a table that lists every payment of a fixed-rate loan: the payment number, the total payment, the interest portion, the principal portion and the balance left after each payment. The interest portion is \(I = B \times r\), with \(B\) the current balance and \(r\) the periodic rate. The principal portion is the payment minus the interest. As the balance falls, interest shrinks and principal grows, while the total payment stays the same.

Which formula does the amortization calculator use?

The calculator uses two formulas. The payment formula is \(M = P \dfrac{r(1+r)^n}{(1+r)^n - 1}\), where \(P\) is the principal, \(r\) the periodic rate (the annual rate divided by the payments per year) and \(n\) the total number of payments. The interest formula is \(I_t = B_{t-1} \times r\), where \(B_{t-1}\) is the balance at the start of the period. Lenders in the US use the same math for fixed-rate loan disclosures under the Truth in Lending Act and Regulation Z, although the exact day-count convention varies by loan.
Disclaimer: This calculator is designed to provide helpful estimates for informational purposes. While we strive for accuracy, financial (or medical) results can vary based on local laws and individual circumstances. We recommend consulting with a professional advisor for critical decisions.