Amortization Schedule Calculator

Amortization is the process of paying off a debt through equal periodic payments that cover both interest and principal. At the start of the loan the balance is at its largest, so the interest portion of each payment is at its largest too. As the balance falls, less of each payment is consumed by interest and more of it goes to principal. The payment amount stays constant; only the split moves.

The standard payment formula is P × i ÷ (1 − (1 + i)^−n), where P is the loan amount, i is the periodic interest rate (the annual rate divided by twelve for a monthly loan), and n is the total number of payments. That single equation produces the number your lender quotes, and every row of the schedule flows from it.

Each month the lender computes interest as the current balance multiplied by the monthly rate. Whatever is left of your payment after that interest is subtracted reduces the balance. Because the interest charge is recalculated on the new, smaller balance every month, the principal portion grows a little each period — slowly at first, then noticeably faster in the back half of the term.

This is why a 30-year mortgage feels like it is not moving for the first several years. On a $350,000 loan at 6.5%, the first payment is roughly $2,212, of which about $1,896 is interest and only $316 touches the balance. It takes roughly eighteen years before the principal portion of a payment overtakes the interest portion.

A full schedule has one row per payment with five columns: payment number, payment amount, interest charged, principal paid, and remaining balance. Most people never need the row-level detail — the annual summary this calculator produces answers the questions that actually matter, like how much interest you will pay in a given tax year and what the balance will be when you expect to sell.

Look first at the total interest figure. On a 30-year loan at typical rates it commonly approaches or exceeds the amount borrowed. That number is not a fee anyone quotes you up front, but it is the real price of financing, and seeing it written down changes how people think about term length and extra payments.

Next, find your expected exit point. Most homeowners do not keep a mortgage for its full term — they sell or refinance. If you plan to move in seven years, the balance at month 84 is the number that determines your payoff and your equity, and the interest paid through that point is the actual cost of the loan you will experience.

Finally, watch the crossover month — the first payment where principal exceeds interest. A shorter term or a lower rate pulls that crossover earlier; a longer term pushes it out. It is a useful single-number gauge of how front-loaded a loan really is.

Every extra dollar sent to principal permanently removes all future interest that dollar would have generated. On a fixed-rate loan that is a guaranteed, risk-free, after-tax return equal to your interest rate. Nothing else in a household budget offers a comparable certainty.

The effect compounds because the extra payment shortens the term. Adding $200 a month to a $350,000 loan at 6.5% removes well over $100,000 of interest and cuts roughly seven years off the schedule. The savings are not linear — they are largest when the extra payments start early, because early principal reduction avoids the most interest-heavy years.

A single lump sum works the same way. A $10,000 payment in year two saves far more than the same $10,000 in year twenty, even though both reduce the balance by the identical amount. If you receive a bonus or tax refund and are deciding when to apply it, sooner is always better on a fixed-rate loan.

Two mechanics matter. First, tell your servicer the extra amount is to be applied to principal, not held as a prepaid future payment — many will otherwise park it and simply advance your due date. Second, check for prepayment penalties. They are rare on conforming residential mortgages but common on commercial loans and some auto and private student loans.

Extra payments are not always the best use of money. Pay down any higher-rate debt first, capture a full employer retirement match before anything else, and keep an emergency fund intact — home equity is not liquid, and a paid-down mortgage does nothing for you the month you lose an income.

Shortening the term raises the monthly payment but slashes lifetime interest. A $350,000 loan at 6.5% costs roughly $2,212 a month over 30 years and around $3,049 over 15 years — about 38% more per month, but well under half the total interest, because the balance simply is not outstanding long enough to accrue it.

A 30-year loan with voluntary extra payments gives you most of the 15-year benefit while keeping the lower required payment as a safety valve. That flexibility has real value in an uncertain income year, and it is why many advisers prefer the long term plus discipline over the short term plus obligation.

Rate changes move the payment less than people expect and the total interest more than they expect. One percentage point on a $350,000 30-year loan changes the payment by roughly $230 but changes total interest by roughly $80,000. When shopping lenders, compare total interest over your expected holding period, not just the monthly figure.

Watch how points fit in. Paying discount points buys a lower rate; whether that pays off depends on how long you keep the loan. Divide the point cost by the monthly savings to get a break-even month, then compare it to your realistic holding period — not to the full 30-year term.

The amortized payment covers principal and interest only. Most mortgage payments also include property taxes and homeowners insurance held in escrow, and often mortgage insurance and HOA dues. Those escrow items can add hundreds of dollars a month and they change over time as tax assessments and premiums move, even though the amortized portion never does.

Private mortgage insurance drops off once you reach roughly 20% equity, and the amortization schedule tells you exactly when that happens based on scheduled payments alone. Extra payments accelerate it. On a conventional loan you may request cancellation at 80% loan-to-value based on the original value, and it terminates automatically at 78%.

Interest paid may be deductible if you itemize, subject to current limits on acquisition debt, which effectively reduces the after-tax cost of the interest column. Most households now take the standard deduction, so do not assume a tax benefit without checking your own return.

Adjustable-rate loans amortize on the same math, but the schedule is only valid until the next rate adjustment. Use the calculator to model your fixed-rate period, then re-run it at the worst-case adjusted rate to see the payment shock you would need to absorb.

Enter the loan amount you will actually finance — purchase price minus down payment, plus any financed closing costs or funding fees. Do not include the down payment itself; it is never part of the amortized balance.

Enter the nominal annual interest rate, not the APR. APR bundles certain fees into a rate-like figure for comparison purposes, but the lender amortizes your loan on the note rate. Using APR here will overstate both your payment and your interest.

Set the term in years, then add any planned extra monthly principal payment. The results show your required payment, the payoff time with the extra amount included, total interest, and how much interest and how many months the extra payment removes compared with paying the minimum.

The annual table beneath the results summarizes interest paid, principal paid, and ending balance for each year. Use the ending-balance column to find your payoff figure at any future point, and the interest column when estimating a mortgage interest deduction.

Results are estimates for planning. Your servicer may round differently, apply payments on different dates, or charge daily rather than monthly interest, so expect small differences against an official statement.