Amortization Calculator
Use this amortization calculator to see how a fixed-rate loan such as a mortgage is paid down over time. Enter the loan amount, interest rate and term to get your monthly principal-and-interest payment, total interest and a year-by-year amortization schedule. Then add an extra monthly payment or a one-time lump sum to see how much interest you save and how many months come off the loan.
Updated
Results
- New monthly paymentAfter the lump sum, when set to lower the payment
- Total interest
- Payoff time (months)
- Payoff time (years)
- Interest savedCompared with no extra payments
- Months savedCompared with no extra payments
- Remaining balanceAfter the number of years you entered
- Total paidPrincipal plus interest
| Year | Paid | Principal | Interest | Balance |
|---|
Results are estimates. See the methodology below.
How to use the calculator
- Loan amount: the balance you borrow (for a mortgage, the price minus your down payment).
- Interest rate: the yearly note rate on your loan, not the APR.
- Loan term: the number of years, such as 15 or 30. You can instead choose repayment rate and set the share of the loan you repay in the first year; the payment then follows from the rate plus that percentage.
- Advanced options: an extra amount added to every monthly payment, a one-time lump sum in a chosen month, and what that lump sum should do: shorten the loan or lower the payment. You can also enter a number of years to see the balance left at that point.
The new payment appears only when a lump sum lowers the payment, and interest saved and months saved appear only when you enter extra payments.
How the calculator works
Interest for each month is the annual rate ÷ 12 applied to the remaining balance. The fixed payment for a loan of L over n months at monthly rate i is:
P = L × i ÷ (1 − (1 + i)^−n)
Each month, interest is charged first and the rest of the payment reduces principal. Because the balance is highest at the start, early payments are mostly interest; the principal share grows every month. Extra payments go straight to principal. When a lump sum is set to lower the payment, the payment is recalculated over the months left on the original term.
Results cover principal and interest only. Property taxes, homeowners insurance, PMI and HOA dues that may be part of your monthly mortgage bill are not included, and adjustable rates are not modeled.
Worked examples
1. $300,000 at 6.5% for 30 years
The monthly payment is $1,896.20. Over 30 years you pay $682,633.47, of which $382,633.47 is interest. The schedule shows how slowly the balance falls at first:
| Year | Principal | Interest | Balance at year end |
|---|---|---|---|
| 1 | $3,353.18 | $19,401.27 | $296,646.82 |
| 10 | $6,009.43 | $16,745.02 | $254,328.38 |
| 20 | $11,491.13 | $11,263.32 | $166,995.85 |
| 30 | $21,973.15 | $781.30 | $0.00 |
A 15-year term at the same rate raises the payment to $2,613.32 but cuts total interest to $170,397.98.
2. Paying $200 extra every month
On the same loan, an extra $200 a month pays it off in 277 months instead of 360, 83 months sooner, and saves $103,448.79 in interest.
3. A $10,000 lump sum after the first year
| Lump sum used to… | Payment after | Payoff | Interest saved |
|---|---|---|---|
| Shorten the loan | $1,896.20 | 329 months | $50,229.61 |
| Lower the payment | $1,832.28 | 360 months | $12,244.60 |
Keeping the payment and shortening the loan saves about four times as much interest; lowering the payment frees up $63.92 a month in cash flow.
How to read your results
Compare the principal and interest bars in the chart: the point where principal overtakes interest shows when you start building equity faster. If you plan to sell or refinance within a few years, check the balance-after field for that year. Extra payments have the largest effect early in the loan, when interest makes up most of each payment.
Frequently asked questions
What is an amortization schedule?
It's a table that splits each payment into interest and principal and shows the balance left afterward. Lenders and servicers can provide one for your loan; this calculator builds a yearly version from the amount, rate and term you enter.
Is it better to shorten the loan or lower the payment?
Shortening the loan saves more interest, as example 3 shows, because your full payment keeps attacking the smaller balance. Lowering the payment gives you breathing room each month. Ask your servicer how an extra payment will be applied before you send it.
Can my lender charge a prepayment penalty?
Some mortgages have one. Under Regulation Z (12 CFR 1026.43(g)), a penalty is allowed only on certain qualified mortgages with an APR that can't rise and that aren't higher-priced loans. It can't apply after the first three years and is capped at 2% of the amount prepaid in the first two years and 1% in the third. The CFPB notes that small extra principal payments usually don't trigger a penalty, but confirm with your lender.
Where can I check whether my loan has a prepayment penalty?
Page 1 of your Closing Disclosure states whether the loan has one. Page 5 shows the Total of Payments and the Total Interest Percentage, which you can compare with this calculator's totals.
Why is my payment higher than the calculator shows?
Most mortgage bills include escrow for property taxes and homeowners insurance, and sometimes mortgage insurance. The calculator shows principal and interest only.
What does the error about the lump-sum month mean?
The month you chose comes after the last payment of the term. Pick a month within the loan, for example 12 for the end of the first year.
Sources
This calculator gives estimates for educational purposes only and is not financial advice. Your lender's schedule may differ because of rounding, payment dates, escrow and loan terms.