Amortization calculator

What is amortization?

Amortization is the gradual repayment of a loan through scheduled payments. Each payment on a fully amortizing mortgage covers interest and pays down part of the principal. The amortization schedule shows how those amounts change and how much you still owe after each payment. See Freddie Mac’s introduction to mortgage amortization for an overview.

On a fixed-rate loan with regular payments, principal and interest generally total the same amount each month. The split changes because interest is calculated on the outstanding balance. Early payments typically contain more interest; as the balance falls, more of each payment goes toward principal. This calculator lets you follow that progression and compare repayment scenarios.

How an amortization payment is calculated

For the monthly model, multiply the beginning balance by the annual interest rate divided by 100 and then by 12. Subtract that month’s interest from the scheduled principal-and-interest payment to find the scheduled principal reduction. Extra principal, if entered, reduces the balance further.

For example, a $320,000 loan at an illustrative 6.5% fixed rate over 30 years has a monthly principal-and-interest payment of about $2,022.62. The first month’s interest is $1,733.33, leaving $289.29 for principal and an ending balance of $319,710.71 without extra payments. The next month starts from that lower balance. The model rounds interest to cents each period and adjusts the final payment to the amount remaining.

Factors that affect mortgage amortization

Loan balance and financed costs

This calculator starts with home price minus down payment, plus any additional financed costs. A larger starting balance increases the payment and total interest when the rate and term stay the same. Upfront closing costs paid in cash do not reduce the principal or enter the loan’s amortization schedule.

Interest rate and repayment term

At the same balance and term, a higher rate increases the payment and interest cost. A shorter term generally requires a larger payment but repays the balance faster. Compare the same balance across different rates and terms to see the effect without changing several assumptions at once. The calculator holds the rate constant; it does not forecast adjustable-rate changes.

Extra principal payments

Monthly, annual, or one-time extra principal payments lower the balance used to calculate later interest. The model keeps the scheduled payment unchanged, which can shorten the payoff time. Enter the timing as well as the amount: an earlier principal reduction affects more future interest periods. Confirm how your servicer applies additional payments and check your loan’s terms. The CFPB explains when a prepayment penalty may apply. This model does not include a penalty or automatically recast payments.

Payment frequency and interest conventions

The monthly option uses 12 periods per year. True biweekly uses 26 modeled periods, a nominal annual rate divided by 26, and payment dates spaced 14 days apart. Biweekly collection is treated as a monthly loan without automatic acceleration. These options are different from simply making half a monthly payment every two weeks; confirm your lender’s actual timing and interest convention before comparing the schedules.

How to read your amortization schedule

Start with the beginning balance, then follow the loan payment, interest, principal, extra principal, and ending balance across the row. Cumulative interest adds the interest paid so far. In the line chart, Principal and Interest are cumulative amounts, while Remaining balance is the debt still outstanding. The bars show the principal and interest paid during each displayed period.

Choose Yearly for a summary or Monthly for individual payment rows. Expand a calendar year to view its payments, and use Show full schedule to display the remaining rows. The first and last calendar years may be partial years. With true biweekly selected, individual rows represent biweekly payment dates rather than calendar months.

Loan repayment versus the total cost of owning a home

Property taxes, homeowners insurance, PMI, and HOA fees can affect the housing budget, but they do not pay down the mortgage balance. On this page, property tax, homeowners insurance, and upfront closing costs begin at zero, and the additional-cost section starts closed. Enter your own amounts if you want to include them in the housing-cost estimate. The schedule still separates them from loan repayment.

Use the mortgage payoff calculator to explore a target payoff timeline, or the refinance calculator to compare a replacement loan. An amortization estimate is not a lender’s payoff quote: daily interest, fees, and payment application rules can change the amount actually due.

Frequently asked questions about amortization