Amortization Calculator
Use our free online amortization calculator to generate a complete loan amortization schedule for any fixed-rate loan. Enter your loan amount, interest rate, and term to see your monthly payment, total interest, and a full breakdown of every payment from start to finish.
How to Use This Amortization Calculator
Using this online amortization calculator is simple:
- Enter your loan amount.
- Enter the annual interest rate.
- Enter the loan term in years or months.
- Optionally, enter any extra monthly, annual, or one-time payments.
- Click Calculate to see your monthly payment, total interest, and full amortization schedule.
What Is an Amortization Calculator?
An amortization calculator is an online tool that shows you how each monthly loan payment is divided between principal and interest over the full life of a loan. It generates an amortization schedule, a complete table of every payment, so you can see exactly how your loan balance reduces over time.
People use a loan amortization calculator when taking out a mortgage, car loan, personal loan, or student loan. It helps you understand the total cost of borrowing and plan your finances with confidence.
This online amortization calculator supports any fixed-rate loan and gives you instant, accurate results without any manual calculations.
What Is Amortization?
Amortization is the process of paying off a loan through equal monthly payments over a fixed period. Each payment covers two things: the interest charged on the remaining balance and a portion of the principal amount borrowed.
In the early months, most of each payment goes toward interest because the outstanding balance is high. As the balance decreases, the interest portion gets smaller and more of each payment goes toward the principal. By the final payment, almost the entire amount clears the remaining principal balance.
Amortization Formula
The formula used to calculate the monthly payment in an amortization schedule is:
Where:
- M = Monthly payment
- P = Principal loan amount
- r = Monthly interest rate (annual rate ÷ 12 ÷ 100)
- n = Total number of monthly payments (years × 12)
Each row in the amortization schedule is then calculated as:
How to Calculate an Amortization Schedule
Example: You borrow $200,000 at a 6% annual interest rate for 15 years.
- Step 1: Find the monthly interest rate: r = 6 ÷ 12 ÷ 100 = 0.005
- Step 2: Find total number of payments: n = 15 × 12 = 180
- Step 3: Calculate monthly payment: M = 200,000 × [0.005 × (1.005)^180] ÷ [(1.005)^180 − 1] = $1,687.71
- Step 4: Month 1 interest = 200,000 × 0.005 = $1,000.00
- Step 5: Month 1 principal = 1,687.71 − 1,000.00 = $687.71
- Step 6: Remaining balance = 200,000 − 687.71 = $199,312.29
- Step 7: Repeat using the new balance for each following month until the balance reaches zero.
Sample Amortization Schedule
Here is a sample of the first six months for a $200,000 loan at 6% annual interest over 15 years:
| Month | Payment | Interest | Principal | Balance |
|---|---|---|---|---|
| 1 | $1,687.71 | $1,000.00 | $687.71 | $199,312.29 |
| 2 | $1,687.71 | $996.56 | $691.15 | $198,621.13 |
| 3 | $1,687.71 | $993.11 | $694.61 | $197,926.53 |
| 4 | $1,687.71 | $989.63 | $698.08 | $197,228.45 |
| 5 | $1,687.71 | $986.14 | $701.57 | $196,526.87 |
| 6 | $1,687.71 | $982.63 | $705.08 | $195,821.79 |
| 180 | $1,687.71 | $8.40 | $1,679.31 | $0.00 |
Over 180 payments, total repaid = $303,787.80. Total interest paid = $103,787.80.
Mortgage Amortization Calculator
A mortgage is the most common loan that uses full amortization. Because mortgage terms run 15 to 30 years, the total interest paid is often significant.
For example, on a $300,000 mortgage at 7% annual interest, a 30-year term gives a monthly payment of $1,995.91 with total interest of $418,527.60. The same loan over 15 years gives a monthly payment of $2,696.48 but a total interest of only $185,366.40, a saving of over $233,000.
A mortgage amortization calculator helps you compare these options clearly before making a decision.
How Extra Payments Affect Amortization
Making extra payments reduces your principal faster, which lowers the interest charged in future months and shortens your loan term.
For example, adding $200 per month to a $200,000 loan at 6% over 15 years pays the loan off in approximately 152 months instead of 180 and saves around $14,400 in total interest.
Extra payments can be made monthly, annually, or as a one-time amount. Any additional payment goes directly toward reducing your principal balance.
FAQs
What is an amortization calculator?
An amortization calculator is an online tool that generates a complete loan repayment schedule, showing how each payment is divided between interest and principal across the full loan term.
What is an amortization schedule?
An amortization schedule is a table that lists every loan payment from start to finish. It shows the interest paid, principal paid, and remaining balance for each payment period.
How is amortization calculated?
Each month, interest is calculated on the remaining balance. That interest is subtracted from the fixed monthly payment, and the rest reduces the principal. This repeats until the balance reaches zero.
Why do I pay more interest at the start of the loan?
Because interest is charged on the outstanding balance, which is at its highest in the early months. As the principal reduces, the interest charged each month also decreases.
What is a mortgage amortization calculator used for?
It is used to compare mortgage terms, calculate total interest costs, and see how different loan amounts and rates affect your monthly payment and repayment timeline.
How do extra payments affect my amortization schedule?
Extra payments reduce your principal balance faster, which lowers future interest charges and shortens the total loan term.
Can I use this calculator for a car loan or a personal loan?
Yes. This calculator works for any fixed-rate loan including auto loans, personal loans, student loans, and mortgages.
What happens at the end of an amortization schedule?
The final payment reduces the remaining balance to zero, meaning the loan is fully paid off.
What is the difference between an amortization calculator and a loan payment calculator?
A loan payment calculator shows your monthly payment amount. An amortization calculator goes further and generates the full month-by-month breakdown of every payment across the entire loan term.
Is this amortization calculator free?
Yes. Our online amortization calculator is completely free with no sign-up required.