Amortization Calculator
View complete amortization schedule for your loan. Enter values for instant results with step-by-step formulas.
Formula
Each Payment: Interest = Balance × Rate; Principal = Payment - Interest
Interest is calculated on the remaining balance, then subtracted from the fixed payment to determine principal. The principal reduces the balance for the next calculation.
Worked Examples
Example 1: 30-Year Mortgage Amortization
Problem:Create an amortization overview for a $250,000 mortgage at 6% for 30 years.
Solution:Monthly payment calculation:\nP = $250,000, r = 6%/12 = 0.5%, n = 360\n\nM = $250,000 × [0.005(1.005)^360] / [(1.005)^360 - 1]\nM = $1,498.88/month\n\nPayment #1:\nInterest = $250,000 × 0.005 = $1,250\nPrincipal = $1,498.88 - $1,250 = $248.88\nNew Balance = $249,751.12\n\nPayment #360:\nInterest = $7.47\nPrincipal = $1,491.41\nFinal Balance = $0
Result:Payment: $1,498.88 | Total Interest: $289,595 over 30 years
Example 2: Impact of Extra Payment on 15-Year Loan
Problem:How does $200 extra monthly affect a $150,000 loan at 5.5% for 15 years?
Solution:Standard payment: $1,225.63/month\nWith $200 extra: $1,425.63/month\n\nWithout extra:\n- 180 payments\n- Total interest: $70,613\n\nWith $200 extra:\n- Paid off in month 144 (12.0 years)\n- Total interest: $55,215\n\nSavings:\n- 36 months earlier (3 years)\n- $15,397 interest saved
Result:$200 extra saves $15,397 and 36 months
Example 3: Year 1 vs Year 30 Payment Breakdown
Problem:Compare principal vs interest in year 1 and year 30 of a $200,000 mortgage at 6.5%.
Solution:Monthly payment: $1,264.14\n\nYear 1 (12 payments):\n- Principal paid: $2,235\n- Interest paid: $12,934\n- Principal %: 14.7%\n\nYear 30 (final 12 payments):\n- Principal paid: $14,649\n- Interest paid: $521\n- Principal %: 96.6%\n\nNote how interest drops from about 85.3% of the first-year cash flow to roughly 3.4% in the final year.
Result:Year 1: 17% principal | Year 30: 98% principal
Frequently Asked Questions
What is an amortization schedule?
An amortization schedule is a table showing each loan payment broken down into principal and interest components, along with the remaining balance after each payment. It demonstrates how the loan balance decreases over time and how the proportion of principal vs. interest changes throughout the loan term.
How does extra payment affect my amortization?
Extra payments go directly to principal, reducing your balance faster than scheduled. This means: 1) Less interest accrues on future payments, 2) More of each subsequent payment goes to principal, 3) You pay off the loan early, 4) You save significantly on total interest. Even small extra payments compound to major savings.
What's the difference between amortization and simple interest?
Simple interest is calculated only on the original principal: Interest = Principal × Rate × Time. Amortized loans calculate interest on the remaining balance, which changes with each payment. Credit cards typically use compound interest (interest on interest). Most mortgages and auto loans use amortization.
Can I get a copy of my amortization schedule?
Yes! Your lender must provide one upon request. You can also generate one using calculators like this one. Having a schedule helps you: track your payoff progress, understand your payment breakdown, plan extra payments strategically, and verify your lender's calculations.