Amortization Schedule Calculator
Calculate your monthly mortgage or loan payment and see a year-by-year breakdown of principal vs. interest over the life of your loan.
Loan amortization is the process of paying down a loan through fixed periodic payments, where each payment covers both interest and principal. Early payments are mostly interest; later payments are mostly principal. Understanding amortization helps you see exactly how much a loan really costs.
Monthly payment formula: M = P × [r(1+r)ⁿ] ÷ [(1+r)ⁿ − 1]
Where:
- M = monthly payment
- P = principal (loan amount)
- r = monthly interest rate = Annual Rate ÷ 12
- n = total number of payments = Years × 12
Interest portion of any payment: Interest = Remaining Balance × Monthly Rate
Principal portion: Principal Paid = M − Interest
Worked example: $250,000 mortgage, 6.5% annual rate, 30-year term.
r = 6.5% ÷ 12 = 0.5417% = 0.005417 n = 30 × 12 = 360 payments
M = 250,000 × [0.005417 × (1.005417)³⁶⁰] ÷ [(1.005417)³⁶⁰ − 1] M = $1,580.17/month
First payment breakdown: Interest = $250,000 × 0.005417 = $1,354.17 Principal = $1,580.17 − $1,354.17 = $226.00
Total paid over 30 years: $1,580.17 × 360 = $568,861 — meaning $318,861 in interest on a $250,000 loan.
Key insight — extra payments: Adding just $200/month to the above mortgage cuts 6+ years off the term and saves over $60,000 in interest.
Typical loan terms:
- Mortgage: 15 or 30 years
- Auto loan: 3–7 years
- Personal loan: 1–5 years
- Student loan: 10–25 years