Amortization Calculator
Find the level monthly payment on any amortizing loan, see how the total cost splits between principal and interest, then add extra payments to watch the interest you pay and the months on the loan both fall.
Formula
Worked example
$200,000 at 6.5% over 30 years: r = 0.005417, n = 360, so M is about $1,264/month and roughly $255,000 in interest. Adding $200 a month clears it about 7 years early and saves tens of thousands in interest.
What amortization means
An amortizing loan is repaid in equal periodic payments that cover both interest and principal. Because interest is charged on the outstanding balance, the interest portion of each payment falls over time while the principal portion rises, even though the total payment stays the same. By the final payment the balance reaches zero.
How the payment is calculated
The level payment comes from the standard amortization formula above, where M is the monthly payment, P is the loan amount, r is the monthly interest rate (annual rate divided by 12), and n is the number of monthly payments. The term can be set in whole years plus extra months for loans like a 5 year 6 month auto note. Multiplying M by n gives the scheduled total repaid; subtracting the original loan leaves the total interest.
Extra payments and early payoff
Turn on extra payments to add a fixed amount to every month and an optional lump sum once a year. Every extra dollar goes straight to principal, which lowers all future interest, so the loan amortizes faster than the schedule. The calculator re-runs the payoff with your overpayments and reports the interest saved and the number of months cut off the term. Even modest extra payments early in a long loan can save a surprising amount, because they remove interest that would otherwise compound for years.
Reading the schedule and chart
The balance chart shows the loan falling to zero, steeply at first when extra payments are switched on. The year by year schedule lists the principal, interest and remaining balance for each year, plus an extra column when overpayments are active so you can see how much of each year went above the scheduled amount. The donut splits the lifetime cost into the amount you borrowed and the interest on top, which is the clearest single picture of what a loan really costs.
How the term changes total interest
| Term | Approx. monthly | Approx. total interest |
|---|---|---|
| 10 years | 2,271 | 72,500 |
| 15 years | 1,742 | 113,600 |
| 20 years | 1,491 | 157,900 |
| 30 years | 1,264 | 255,100 |
Illustrative figures for a 200,000 loan at 6.5%, principal and interest only.
Frequently asked questions
What is an amortization schedule?
It is a table listing every payment and showing how each one splits between interest and principal, along with the remaining balance. This calculator shows a year by year schedule and a balance chart, and reports the lifetime totals above it.
How do extra payments shorten the loan?
Anything you pay above the scheduled amount reduces the principal directly. Since interest is charged on the balance, a lower balance means less interest every month after, which compounds into a faster payoff. Turn on extra payments to see the interest saved and the months removed from the term.
Why is so much of my early payment interest?
Interest is charged on the balance, which is highest at the start. As the balance falls, less of each payment goes to interest and more to principal, so the principal slice grows toward the end of the term.
Does this include fees, taxes or insurance?
No, it covers principal and interest only. Origination fees, property taxes or insurance that may be bundled into a real loan payment are not included here. Use a dedicated mortgage calculator if you need those added in.