Amortization Calculator

Calculate your monthly payment and full amortization breakdown — principal, interest, and balance over time.

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Enter your values and click Calculate

Amortization is the process of paying off a loan through scheduled, equal payments over time. Each payment covers accrued interest first, with the remainder reducing the principal balance — a structure that means the early years of a loan are heavily weighted toward interest rather than equity. This calculator shows your fixed monthly payment, total interest paid over the life of the loan, the total amount paid, and key balance milestones at year 1, year 5, year 10, and the loan midpoint. These milestones are especially valuable for homeowners who want to understand how much equity they have built and when refinancing might make financial sense. Mortgage borrowers, auto loan holders, and personal loan recipients all benefit from seeing the full picture rather than just the monthly payment figure. Understanding amortization helps you make smarter decisions about extra payments, refinancing timing, and loan term selection — a 15-year mortgage costs far less in total interest than a 30-year mortgage on the same principal.

How It Works

Monthly payment: M = P × r(1+r)^n / ((1+r)^n − 1), where P = principal, r = monthly rate (annual ÷ 12), n = total months. Each month: interest = balance × r, principal = M − interest, new balance = balance − principal. Balance milestones are calculated by simulating each payment in sequence.

Examples

$300,000 at 7% for 30 years
A typical 30-year fixed-rate mortgage at a common modern interest rate.
Result: ~$1,996/month. ~$418,000 total interest paid. Balance after 5 years: ~$279,000.
$200,000 at 5.5% for 15 years
A 15-year mortgage showing the trade-off of higher payments for dramatically less total interest.
Result: ~$1,634/month. ~$94,000 total interest — roughly half of a 30-year equivalent.
$25,000 auto loan at 6.5% for 5 years
A new car loan showing typical auto financing costs.
Result: ~$489/month. ~$4,340 total interest over the loan term.

Frequently Asked Questions

Why do I pay so much interest at the start?
Early payments go mostly to interest because the outstanding balance is at its highest point. Each month's interest charge equals the remaining balance multiplied by the monthly rate, so as the principal decreases over time, the interest portion shrinks and more of your fixed payment reduces the principal. This is why making extra principal payments in the early years has an outsized impact on total interest paid.
What happens if I make extra payments?
Any extra principal payment directly reduces the balance, which lowers every future month's interest charge and shortens the overall loan term. On a 30-year mortgage, adding even one extra monthly payment per year can cut years off the term and save tens of thousands in interest. This calculator shows the baseline schedule; a dedicated extra-payment calculator can model the accelerated payoff.
How do I compare a 15-year vs 30-year mortgage?
Run this calculator twice with the same loan amount and rate but different term lengths. The 15-year loan will show a significantly higher monthly payment but dramatically lower total interest — often less than half. The break-even analysis depends on whether the payment difference could be invested elsewhere at a higher return than your mortgage rate.

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