Amortization Calculator
Break down your loan payments. See how much goes to principal vs interest over time.
Payment Breakdown Over Time
| # | Date | Payment | Interest | Principal | Extra | Balance |
|---|
What Is an Amortization Schedule?
An amortization schedule is a detailed table showing every payment on your loan, how much goes to principal (what you borrowed) versus interest (the cost of borrowing), and your remaining balance after each payment.
Think of it as a roadmap of your loan from day one until it is fully paid off.
Principal
The amount you borrowed. This is the part of your payment that reduces your balance.
Interest
The cost the lender charges for borrowing money. It is calculated on your current balance each period.
How the Calculation Works
The standard fixed-rate loan payment formula is:
M = P × [ r(1 + r)^n ] ÷ [ (1 + r)^n − 1 ]
- M = Regular payment
- P = Loan amount
- r = Rate per period (annual rate ÷ payments per year)
- n = Total number of payments (years × payments per year)
Each payment includes interest based on the current balance. The remaining amount goes toward principal. After principal is applied, the balance drops, and the next payment’s interest is calculated on the new lower balance.
Why Early Payments Are Mostly Interest
This is the biggest “aha” moment for most people. In the early years, payments are mostly interest. Near the end, they are mostly principal. Why? Interest is charged on your current balance, which is highest at the start.
Payment Split on a $300,000 Loan at 6.5% (30 Years)
How to Interpret Your Results
Monthly Payment
Your required principal and interest payment each period. Taxes, insurance, and other costs may be extra.
Total Interest
The total interest you would pay if you make every scheduled payment and keep the loan for the full term.
Total Cost
Your principal plus total interest over the full loan term. This does not include taxes, insurance, or other loan costs.
The calculator’s chart shows how the principal and interest split changes over time, along with your declining loan balance.
The Power of Extra Payments
Adding even a small extra payment can save you tens of thousands in interest over the life of a long-term loan.
| Extra/Month | Interest Saved | Paid Off Early |
|---|---|---|
| $0 (base) | 0 | 30 years |
| $50 | ~$33,600 | ~2 years |
| $100 | ~$61,000 | ~4 years |
| $200 | ~$103,400 | ~7 years |
Based on a $300,000 loan at 6.5% for 30 years, with the extra amount applied to principal each month. Actual savings depend on your loan terms and how your lender applies extra payments.
Tip: Check your loan agreement for any applicable prepayment penalty before making large extra payments or paying off your loan early.
Common Mistakes to Avoid
Confusing APR with the interest rate
APR reflects the interest rate plus certain loan costs and fees. When comparing mortgage offers, look at both the interest rate and APR, along with the loan’s costs and terms.
Forgetting taxes and insurance
This calculator only shows principal and interest. Your actual payment may be higher if you also pay property taxes, homeowners insurance, mortgage insurance, or other costs.
Ignoring extra payment options
Even a small additional payment can reduce the amount of interest you pay and shorten the loan term.
Choosing a longer term just for a lower payment
A longer loan term usually means a lower monthly payment but more total interest, assuming the same loan amount and interest rate.
Frequently Asked Questions
Can I use this for car loans?
Yes, if the loan is fixed-rate and fully amortizing. The same basic amortization math is used for many car loans, student loans, personal loans, and mortgages.
Does this work for adjustable-rate mortgages (ARMs)?
No. This assumes a fixed rate. If your rate changes, the payment and amortization schedule can change too.
Why is my total interest higher than the loan amount?
On long loans at higher rates, total interest can exceed the original principal. A $300,000 loan at 7% has about $418,000 in total interest over 30 years.
Is bi-weekly the same as twice a month?
No. A biweekly schedule has 26 half-payments per year, which is equivalent to 13 full monthly payments. A twice-monthly schedule has 24 payments per year, or 12 full payments. A true biweekly schedule can pay a loan off faster because it results in one extra full payment per year.
Why does my balance barely drop in year one?
Because a larger share of your early payments goes toward interest. As the balance falls, less interest accrues and more of each payment goes toward principal.
Does a down payment change the schedule?
Yes. Enter the loan amount after your down payment. A bigger down payment means a smaller loan and generally less interest paid, assuming the other loan terms stay the same.