Loan Amortization Calculator

A mortgage payment is two payments wearing one disguise. Part of every dollar you send the bank pays down the loan; the rest pays interest on the balance that remains. In the early years, the interest part dominates so completely that many borrowers pay for a decade and owe nearly what they started with. Amortization is the name for the schedule that splits each payment — and seeing the full schedule changes how you think about debt.

This calculator builds the entire payment schedule for any fixed-rate loan: monthly payment, total interest, total cost, a year-by-year summary, and the complete month-by-month breakdown — principal, interest, and balance for every one of up to 600 payments. Defaults are set to a typical US 30-year mortgage.

What it measures

Three headline numbers: the monthly payment that fully repays the loan over the term, the total interest paid across the life of the loan, and the total of all payments — what the loan actually costs you, principal plus interest. Below that, a yearly summary table shows how the principal-interest split shifts each year, and the full monthly schedule (360 rows for a 30-year loan) shows every payment’s anatomy inside a scrollable panel.

How it works

The monthly payment comes from the standard amortization formula: payment equals principal times the monthly rate, divided by one minus the present-value factor over the full term. That payment stays fixed; what changes each month is the split. Interest for the month is the current balance times the monthly rate, and principal is whatever is left of the payment after interest. As the balance shrinks, the interest slice shrinks and the principal slice grows — the same payment buys more debt reduction every year.

The schedule assumes a fixed rate, fixed monthly payments, and no prepayments, late payments, or escrow for taxes and insurance. Everything recalculates instantly when you edit any input.

Each input, explained

Loan amount — the principal you borrow, default $350,000. For a home purchase this is the price minus your down payment.

Annual interest rate — default 7.00%, labeled as an example you should replace with your actual quote. Enter the rate as a percentage; the calculator divides by 12 for the monthly rate. For context, Freddie Mac’s weekly 30-year fixed average was 6.95% on September 17, 2026, and Bankrate’s daily average was 7.17% on September 24, 2026.

Term — default 30 years. Enter whole years; 15 is the other common US mortgage term.

Worked example

Take the defaults: $350,000 borrowed at 7.00% for 30 years (360 monthly payments). The monthly payment is $2,328.56. Over the life of the loan, the borrower pays $488,281.14 in interest on top of the $350,000 principal — total of all payments $838,281.14.

The yearly summary tells the real story. In year 1, of the $27,942.70 paid, only $3,555.33 goes to principal while $24,387.37 goes to interest — about 87 cents of every dollar. Ending balance after year 1: $346,444.67, barely $3,555 less than the starting amount.

By year 10 the split has improved but interest still leads: $6,663.33 of principal against $21,279.38 of interest, balance $300,343.34. The crossover — when principal finally exceeds interest in a given year — does not arrive until well into the second decade. In the final year, year 30, it is nearly all principal: $26,911.43 of principal, just $1,031.27 of interest, balance zero.

That shape is why extra principal payments early matter so much: $200 of extra principal in month 12 erases not just that $200 but all the interest it would have accrued over 29 years.

Limitations

This models a fixed-rate, fully amortizing loan with on-time payments. It does not include property taxes, homeowner’s insurance, PMI, or HOA dues — for a real mortgage, add those to the payment figure to get your actual monthly housing cost. It assumes no prepayments; any extra principal payment shortens the schedule and cuts total interest, which the calculator does not model. It cannot represent adjustable-rate loans, interest-only periods, balloon payments, or bi-weekly payment plans.

For why mortgage rates move with bond markets, see Bond Yields Explained: Why Rising Yields Rattle Stocks.

Frequently asked questions

Why is the balance barely lower after a year? Because interest is charged on the full outstanding balance, and the balance is largest in year one. With a $350,000 loan at 7%, the first month’s interest alone is $2,041.67 of the $2,328.56 payment. This is the arithmetic of amortization, not a trick — the schedule is front-loaded by design.

Does paying extra principal early really help? Yes, disproportionately so. Interest accrues on the remaining balance, so every dollar of extra principal reduces the base on which every future interest charge is computed. The earlier the prepayment, the more interest it erases.

Should I pick a 15-year or 30-year term? A 15-year term cuts total interest dramatically but roughly doubles the required payment, leaving less cash for investing or emergencies. Run both terms here and compare.

What is the difference between the interest rate and APR? The rate prices the loan; the APR includes certain fees and closing costs spread over the term, so APR is usually slightly higher. This calculator prices the loan at the rate you enter — use APR comparisons when shopping lenders.

Are property taxes and insurance included? No. This schedules principal and interest only. Your lender’s escrowed tax and insurance payments are real costs but separate from the loan’s amortization.

Why does my payment show cents but the total doesn’t quite match? Payments are rounded to the cent and the final payment is adjusted to land the balance exactly at zero, so totals may differ from a naïve 360×payment by a few cents.

More tools in the Cents & Sense: the retirement calculator projects your savings against inflation-adjusted needs, and the currency converter handles cross-border amounts at live rates.

This calculator is an educational tool. Loan terms, taxes, insurance, and fees vary; verify exact figures with your lender before signing. Nothing here is financial or tax advice.