How to use this amortization calculator
- Enter the loan amount, term and interest rate. Use years plus months for terms like 66 months (5 years, 6 months). The default rate, 7.03%, is the average 30-year fixed mortgage rate as of September 24, 2026 (Freddie Mac Primary Mortgage Market Survey). Use the rate on your loan documents for your own schedule.
- Pick the month of your first payment so every row of the schedule shows its date. For an existing loan, choose the original first-payment month.
- Add extra payments (optional): a monthly amount from any payment number, a yearly amount in the month you choose, or a one-time lump sum.
- Read the results: payment, total interest, payoff date, a principal-vs-interest chart, the yearly table and the full monthly schedule. Copy the link to save or share it.
What is amortization?
Amortization means paying off a loan with regular, usually equal, payments that cover the interest due and a slice of the principal, so the balance falls with every payment and reaches zero on schedule. Mortgages, auto loans and personal loans with fixed rates all work this way. On these loans the payment never changes, but its mix does: early payments are mostly interest, later payments are mostly principal.
Not every loan amortizes. With an interest-only loan you pay just the interest for a while and the balance doesn’t shrink; with a balloon loan, a large part of the balance is due in one final payment. For a full picture of a home loan with taxes, insurance and PMI, use the mortgage calculator; for other loan structures, try the loan calculator.
How an amortization schedule works
The payment on a fully amortizing fixed-rate loan comes from the standard annuity formula:
M = P × r(1 + r)^n / ((1 + r)^n − 1)
- M
- monthly payment (principal and interest)
- P
- amount borrowed
- r
- monthly interest rate = annual rate ÷ 12
- n
- number of monthly payments
Each row of the schedule then follows three steps: interest = previous balance × r; principal = M − interest; new balance = previous balance − principal.
Row-by-row example
Take $300,000 at 7.03% for 30 years: r = 7.03% ÷ 12 = 0.0058583, n = 360 and (1 + r)n = 8.1894, so M = $2,001.96.
- Payment 1: interest = $300,000 × 7.03% ÷ 12 = $1,757.50; principal = $2,001.96 − $1,757.50 = $244.46; new balance = $299,755.54.
- Payment 2: interest = $299,755.54 × 7.03% ÷ 12 = $1,756.07; principal = $245.89; new balance = $299,509.66.
Repeating those steps 360 times produces the full schedule. Selected rows:
| Payment # | Payment | Interest | Principal | Interest to date | Balance |
|---|---|---|---|---|---|
| 1 | $2,001.96 | $1,757.50 | $244.46 | $1,757.50 | $299,755.54 |
| 2 | $2,001.96 | $1,756.07 | $245.89 | $3,513.57 | $299,509.66 |
| 3 | $2,001.96 | $1,754.63 | $247.33 | $5,268.20 | $299,262.33 |
| 12 | $2,001.96 | $1,741.28 | $260.68 | $20,993.61 | $296,970.14 |
| 60 | $2,001.96 | $1,656.91 | $345.04 | $102,602.45 | $282,485.12 |
| 120 | $2,001.96 | $1,512.09 | $489.87 | $197,853.20 | $257,618.54 |
| 240 | $2,001.96 | $1,014.54 | $987.41 | $352,661.06 | $172,191.74 |
| 243 | $2,001.96 | $997.09 | $1,004.87 | $355,669.84 | $169,194.66 |
| 300 | $2,001.96 | $600.08 | $1,401.87 | $401,617.16 | $101,030.51 |
| 360 | $2,001.96 | $11.66 | $1,990.30 | $420,703.98 | $0.00 |
You can also jump straight to the balance after any number of payments k:
B_k = P(1 + r)^k − M × ((1 + r)^k − 1) / r
- B_k
- balance after k payments
- k
- number of payments made
Your lender’s schedule may differ by a few cents: lenders round the payment and each month’s interest to the cent, and loans that accrue interest daily vary slightly with the number of days between payments. This calculator keeps full precision and rounds only for display.
How much of your first payment goes to interest?
The first month’s interest is simply the loan amount × r, but the share of the payment it eats depends on the term. That share equals 1 − (1 + r)−n, so it depends only on the rate and the term, not on how much you borrow. The longer the term, the smaller the payment and the larger the interest share:
| Rate | Interest in 1st payment per $100,000 | 30-year loan | 15-year loan | 5-year loan |
|---|---|---|---|---|
| 3% | $250.00 | 59.3% of $421.60 | 36.2% of $690.58 | 13.9% of $1,796.87 |
| 4% | $333.33 | 69.8% of $477.42 | 45.1% of $739.69 | 18.1% of $1,841.65 |
| 5% | $416.67 | 77.6% of $536.82 | 52.7% of $790.79 | 22.1% of $1,887.12 |
| 6% | $500.00 | 83.4% of $599.55 | 59.3% of $843.86 | 25.9% of $1,933.28 |
| 7% | $583.33 | 87.7% of $665.30 | 64.9% of $898.83 | 29.5% of $1,980.12 |
| 8% | $666.67 | 90.9% of $733.76 | 69.8% of $955.65 | 32.9% of $2,027.64 |
| 9% | $750.00 | 93.2% of $804.62 | 73.9% of $1,014.27 | 36.1% of $2,075.84 |
| 10% | $833.33 | 95.0% of $877.57 | 77.5% of $1,074.61 | 39.2% of $2,124.70 |
When does more of your payment go to principal than interest?
The principal part of each payment grows by a factor of (1 + r) every month, so it overtakes the interest part once fewer than ln 2 ÷ ln(1 + r) payments are left, the time it takes a balance to double at the loan’s rate. At 7.03% that is 118.7 payments (about 9.9 years), close to the Rule of 72 estimate of 72 ÷ 7.03 = 10.2 years. Like the first-payment share, the crossover month doesn’t depend on the loan amount:
| Rate | 30-year loan | 20-year loan | 15-year loan |
|---|---|---|---|
| 3% | Month 84 (year 7) | From the 1st payment | From the 1st payment |
| 4% | Month 153 (year 13) | Month 33 (year 3) | From the 1st payment |
| 5% | Month 195 (year 17) | Month 75 (year 7) | Month 15 (year 2) |
| 6% | Month 223 (year 19) | Month 103 (year 9) | Month 43 (year 4) |
| 7% | Month 242 (year 21) | Month 122 (year 11) | Month 62 (year 6) |
| 8% | Month 257 (year 22) | Month 137 (year 12) | Month 77 (year 7) |
| 9% | Month 269 (year 23) | Month 149 (year 13) | Month 89 (year 8) |
| 10% | Month 278 (year 24) | Month 158 (year 14) | Month 98 (year 9) |
On the $300,000 example, the 243rd payment splits into $1,004.87 of principal and $997.09 of interest. By then you will have paid $355,670 in interest, 85% of the loan’s lifetime total.
How extra payments shorten a loan
An extra payment goes entirely to principal, so the balance drops immediately and every later month charges interest on a smaller amount. Your required payment stays the same, but more of each one goes to principal and the loan ends early. Money paid early in the loan saves the most. On the $300,000 example ($420,704 of interest with no extra payments):
| Extra payment | Interest saved | Paid off sooner by | Total interest |
|---|---|---|---|
| $50 a month | $38,706 | 2 years 3 months | $381,998 |
| $100 a month | $69,861 | 4 years 2 months | $350,843 |
| $200 a month | $117,462 | 7 years 2 months | $303,242 |
| $500 a month | $201,496 | 12 years 8 months | $219,208 |
| One extra payment a year ($2,002) | $99,471 | 6 years | $321,233 |
| $10,000 once, with payment 12 | $59,111 | 2 years 10 months | $361,593 |
Before prepaying, check whether your loan has a prepayment penalty; small extra principal payments usually don’t trigger one, but paying off a large part of the balance early might. Ask your lender or servicer to apply extra money to principal rather than to next month’s payment. If you are weighing prepayment against a lower rate, compare the refinance calculator.
What is negative amortization?
Negative amortization happens when your payment doesn’t cover the interest due. The unpaid interest is added to the balance, so you owe more even though you are making payments. With the example loan, the first month’s interest is $1,757.50; paying only $1,000 would leave $757.50 unpaid, and the balance would grow to $300,757.50 instead of falling.
That is risky because you can end up owing more than the home is worth. Under federal rules, a mortgage with negative amortization, an interest-only period or a term over 30 years can’t be a Qualified Mortgage. A standard fixed-rate loan like the ones this calculator models always amortizes, because the scheduled payment is always larger than the interest due.
Amortization vs. depreciation
In accounting and taxes, amortization also means spreading the cost of an intangible asset over time, while depreciation does the same mainly for tangible property such as equipment or rental buildings. For example, the IRS generally requires businesses to amortize the cost of acquired “section 197 intangibles,” such as goodwill, over 15 years, and both deductions are reported on Form 4562. This calculator covers loan amortization only.
Frequently asked questions
What is an amortization schedule?
An amortization schedule is a table that lists every payment on a loan and shows how much of each one pays interest, how much repays principal and the balance left afterward. On a fixed-rate loan the payment stays the same, but the interest share shrinks and the principal share grows each month until the balance reaches zero with the final payment.
How do you calculate an amortization schedule?
First find the payment with M = P × r(1 + r)^n ÷ [(1 + r)^n − 1]. Then, for each month, interest = balance × r, principal = M − interest, and the new balance = old balance − principal. For $300,000 at 7.03% over 30 years, M = $2,001.96 and the first month’s interest is $300,000 × 7.03% ÷ 12 = $1,757.50.
Why does most of my early payment go to interest?
Because interest is charged on the balance you still owe, and the balance is largest at the start. On a 30-year loan at 6%, 83% of the first payment is interest, regardless of the loan amount. On a 5-year loan at the same rate it is only 26%, because the payment is much larger relative to the monthly interest.
When will more of my payment go to principal than interest?
Principal overtakes interest once fewer than ln 2 ÷ ln(1 + r) payments remain, which is roughly 72 ÷ your rate (in percent) years before the loan ends. On the $300,000, 7.03%, 30-year example, that is the 243rd payment, in year 21. The calculator highlights that month in your monthly schedule.
How much can I save by paying extra on my loan?
Adding $100 a month to the $300,000 example loan saves $69,861 in interest and pays it off 4 years 2 months early. Savings are larger at higher rates and when you start early, because extra money goes straight to principal and lowers every later month’s interest. Check your loan for a prepayment penalty and make sure extra payments are applied to principal.
Is it better to pay extra monthly or once a year?
For the same total, paying monthly saves slightly more, because each extra dollar starts reducing interest sooner. On the example loan, $100 a month saves $69,861, while $1,200 paid each December saves $67,066. The difference is small, so pick the schedule you can keep up; a yearly lump sum from a tax refund or bonus still makes a large dent.
Does this work for car loans and personal loans?
Yes. Any loan with a fixed rate and equal monthly payments, such as a typical auto loan or personal loan, amortizes the same way as a fixed-rate mortgage. Enter the term in years and months (a 72-month car loan is 6 years). Lenders that charge interest daily or round each payment to the cent may show figures that differ by a few cents or dollars.