How to use this calculator
- Enter the Loan amount you borrowed or plan to borrow.
- Set the Interest rate (annual) and the Loan term in years.
- Check the Monthly payment, the Total interest, and the month where principal first exceeds interest.
- Scroll the table to find the balance at any month, for example when planning a refinance or a lump-sum payment.
What amortization means
Amortizing a loan means repaying it in scheduled installments so the balance reaches zero at the end of the term. The payment is the same every month, but its make-up changes: each month's interest is the balance times the monthly rate, and the rest of the payment reduces the balance.
Interest_k = B_(k−1) · r; Principal_k = M − Interest_k; B_k = B_(k−1) − Principal_k- B_k = balance after payment number k (B_0 is the loan amount)
- r = monthly interest rate (annual rate ÷ 12 ÷ 100)
- M = level monthly payment from the annuity formula
- k = payment number, from 1 to the last month
Because the balance is highest at the beginning, early payments are mostly interest. Every payment lowers the balance a little, so the next month's interest is a little smaller and more goes to principal.
Example: $300,000 at 6.5% for 30 years
The monthly payment is $1,896.20. In month 1, interest is $1,625.00 and only $271.20 goes to principal, so the balance falls to $299,728.80. By month 6, interest is still $1,617.57.
Over the whole loan you pay $382,633 in interest. Principal first exceeds interest in month 233, almost 19 and a half years in, and the loan is half repaid only after 257 months, well past the midpoint of the term.
Comparing terms
On the same $300,000 at 6.5%, a 15-year term has a payment of $2,613.32, total interest of $170,398, and principal overtakes interest in month 53. The shorter term costs about $212,000 less interest but needs roughly $717 more each month.
If you only need an estimate of the payment on a home purchase including taxes and insurance, use the mortgage calculator.
How to use the schedule
- Before refinancing, read the balance at the month you would close and compare the new payment and term.
- To plan a lump-sum payment, find the balance you would pay off and how many months of interest it removes.
- For tax or record-keeping, add up the interest column for a calendar year. Whether interest is deductible depends on the loan type; see the IRS source below.
- To see the impact of regular extra payments, use the loan payoff calculator.
Assumptions and limits
The schedule assumes a fixed rate, equal monthly payments and interest calculated monthly on the remaining balance. Real loans may differ: some compute interest daily, some adjust the rate, and the last payment can differ by a few cents because of rounding. Escrow, mortgage insurance and fees are not included.
Your lender's statement is the final authority on your payoff balance. Ask for a payoff quote before sending a large payment.
Frequently asked questions
What is an amortization schedule?
A table listing every payment on a loan with the part that pays interest, the part that pays principal and the balance left.
Why do I pay so much interest at the start?
Interest is charged on the outstanding balance, which is at its maximum on day one. As you repay, the interest part shrinks.
How does an extra payment change the schedule?
Extra money goes straight to principal, which lowers every later month's interest and shortens the loan.
Can I amortize a loan with a balloon or interest-only period?
Not with this tool. It handles fully amortizing loans with equal payments.
Is the schedule the same for a 15-year and a 30-year loan?
No. The shorter loan has a higher payment, repays principal faster and charges far less total interest.