Amortization Calculator

The Amortization Calculator generates a complete payment schedule showing exactly how each monthly payment is split between principal and interest over the life of your loan. It reveals how loan balances decrease over time and helps you understand the true cost of borrowing.

Amortization literally means 'to kill' (from the Latin 'mort' = death) — it describes the gradual death of a debt. An amortization schedule is essential for understanding how front-loaded interest payments work: in a typical 30-year mortgage, you pay more interest than principal for roughly the first 20 years. This is why extra payments early in a loan have an outsized impact on total interest savings.

How the Formula Works

Monthly Payment = P × [r(1+r)^n] ÷ [(1+r)^n − 1]. Interest portion = Remaining Balance × Monthly Rate. Principal portion = Payment − Interest.

How to Use This Calculator

  1. Enter the loan amount, interest rate, and term
  2. View the monthly payment amount
  3. Scroll through the full amortization schedule
  4. See the running balance, interest paid, and principal paid for each payment

Tips & Best Practices

  • Extra payments early in the loan save the most interest — each dollar of principal paid early prevents years of interest
  • Biweekly payments (half your monthly payment every 2 weeks) result in 13 full payments per year instead of 12
  • Before making extra payments, check that your lender applies them to principal and doesn't charge prepayment penalties
  • Use the amortization schedule to set milestones — watching your principal portion grow can be motivating

Important Limitations

  • Assumes fixed rate — adjustable rate mortgages will have changing payment amounts
  • Does not include escrow payments for taxes and insurance
  • Rounding can cause the final payment to differ slightly from the regular payment
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