Amortization Calculator
Watch a loan shrink. The monthly payment, the total interest, and the year-by-year split between what you borrowed and what it costs.
Last updated: August 5, 2026
How amortization works
For a fixed-rate loan, the monthly payment stays the same for the entire term. What changes is the split: interest is calculated on the outstanding balance each month, so early in the loan — when the balance is biggest — most of the payment is interest. As the balance falls, an increasing share of the same payment goes to principal.
The formula
Where P is the principal, r is the monthly rate (annual ÷ 12 ÷ 100) and n is the total number of payments. Each month: interest = balance × r, then principal = payment − interest.
Worked example
A $250,000 loan at 5% for 30 years.
Payment ≈ $1,342. Total interest ≈ $233,139. Total repaid ≈ $483,139.
Add just $100/month extra and this loan pays off years earlier and saves tens of thousands in interest.
The schedule makes the real lesson visible: the length of the term matters as much as the interest rate. At the same 5%, a 15-year loan costs roughly half as much interest as a 30-year loan.
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Frequently asked questions
Are the numbers exact for my mortgage?
This calculator assumes equal fixed payments and a constant rate. Real mortgages add escrow for taxes and insurance, plus possible PMI, so the actual statement will be higher than the principal-and-interest payment shown.
What is the benefit of extra payments?
Every extra dollar directly reduces principal, so it stops accruing interest forever after. Small regular extras like $100 a month cut both the term and the total interest substantially on long loans.
Is a longer term ever smarter?
Sometimes, if you invest the difference at a higher after-tax return than the loan rate, or if keeping payments low protects cash flow. It is a choice about costs and risk, not a one-size-fits-all answer.
This is an amortization estimate only, excluding taxes, insurance, PMI and fees. It is not financial advice; for purchase decisions, confirm terms with a lender.