Amortization Calculator

Amortization Calculator

This amortization calculator computes your monthly loan payment, total interest paid, and total cost for any fixed-rate loan. It also generates a full amortization schedule showing how each payment is split between principal and interest over the life of the loan — helpful for mortgages, car loans, and personal loans. Enter your loan amount, interest rate, and term to get an instant breakdown.

How Amortization Is Calculated

The monthly payment for a fully amortizing loan is computed with the standard annuity formula:

M = P x [r(1 + r)^n] / [(1 + r)^n - 1]

Where P is the loan principal, r is the monthly interest rate (annual rate / 12 / 100), and n is the total number of monthly payments (years x 12). Each month, the lender charges interest on the remaining balance. Whatever is left of your fixed payment after covering that interest goes toward reducing principal. Because the balance shrinks each month, the interest portion of each payment also shrinks — which is why principal pay-down accelerates in the later years of the loan.

Worked Examples

Example 1 — First-time buyer, 30-year loan at 7.0% Loan: $320,000. Monthly payment: $2,129. Total interest over 30 years: $446,440. Total paid: $766,440. In month 1, $1,867 goes to interest and only $262 goes to principal.

Example 2 — Move-up buyer, 15-year loan at 6.5% Loan: $400,000. Monthly payment: $3,487. Total interest: $227,660. Compared to the same loan on a 30-year schedule (monthly payment $2,528, total interest $509,780), the 15-year option saves $282,120 in interest at the cost of $959 more per month.

Example 3 — Refinance from 30-year to 20-year Remaining balance: $210,000 with 22 years left on an old 6.0% loan. Monthly payment: $1,302. Refinancing into a 20-year at 6.75% raises the monthly payment to $1,595 but cuts the remaining life by 2 years and saves about $68,000 in total interest.

Amortization Reference Table

When to Use This Calculator

• Before applying for a mortgage, to confirm you can afford the monthly payment at current rates
• When comparing a 15-year versus 30-year loan to see the exact dollar difference in total interest
• To evaluate whether refinancing makes sense by modeling the new payment and remaining interest
• When planning extra principal payments, to see how much time and money each additional payment saves
• For any fixed-rate installment loan — car loans, student loans, personal loans — the formula is identical

Common Mistakes

1. Ignoring total interest in favor of monthly payment — a lower monthly payment almost always means far more interest paid over the life of the loan. A $300,000 loan at 7% costs $418,527 in interest over 30 years versus $185,280 over 15 years.
2. Using the wrong interest rate type — enter the annual percentage rate (APR) or the stated annual rate, not a monthly figure. Entering a monthly rate of 0.58% as 0.58 instead of converting to 6.96% annual will produce a wildly incorrect schedule.
3. Forgetting that PITI exceeds P&I — this calculator shows principal and interest only. Your actual monthly housing cost will be $200-$600 higher once you add property taxes, homeowners insurance, and possibly PMI.
4. Assuming extra payments work the same at any point in the loan — an extra $200/month in year 1 saves significantly more than the same $200 in year 25, because early extra payments prevent years of future interest compounding.

Current Context for 2026

As of early 2026, 30-year fixed mortgage rates are hovering in the 6.75%-7.25% range. At these levels, the interest cost on a typical $350,000 loan runs roughly $430,000-$470,000 over a 30-year term — more than the loan itself. Borrowers who locked in sub-3% rates in 2021 are watching amortization tables that look very different from today’s. If you are buying now, the 15-year versus 30-year trade-off deserves serious attention: the rate differential between the two terms is currently about 0.5%-0.75%, which narrows the payment gap slightly while keeping the total interest savings above $200,000 on most loan sizes.

Tips

1. Compare 15-year and 30-year terms side by side before deciding — a 15-year mortgage on $300,000 at 7.0% saves over $233,000 in total interest compared to 30 years
2. In month 1 of a 30-year loan at 7.0%, roughly 88% of your payment goes to interest; by month 300 that flips to roughly 30% interest
3. Making one extra full payment per year on a $300,000, 30-year loan at 7% shortens the loan by about 5 years and saves over $100,000 in interest
4. Round your payment up to the nearest $50 or $100 — even $50 extra per month on a 30-year loan saves 2-3 years and tens of thousands in interest
5. Biweekly payments (half your monthly payment every two weeks) result in 26 half-payments = 13 full payments per year, effectively one extra payment annually
6. Print or download the full amortization schedule and mark month 180 (year 15) — that is where you typically reach the halfway point on principal for a 30-year loan

Related Calculations

• Mortgage Payment Calculator — adds taxes, insurance, and PMI to the P&I figure
• Mortgage Payoff Calculator — shows how extra payments change your payoff date
• 15 Year Mortgage Calculator — compare against the 30-year schedule instantly
• Interest Only Mortgage Calculator — see what happens when principal pay-down stops