Amortization Calculator
See your monthly payment and a year-by-year breakdown of how each dollar splits between principal and interest.
How to use this calculator
Enter the amount you are borrowing, your annual interest rate, and the loan term in years. The calculator instantly works out your fixed monthly payment and builds a full amortization schedule. The hero number is your monthly payment; below it you will see the total interest you will pay over the life of the loan, the total paid (principal plus interest), and your loan term. Scroll to the year-by-year table to see exactly how much principal and interest you pay each year and what your balance will be at the end of each year.
How this is calculated
We use the standard fixed-payment loan formula. With a monthly rate r (your annual rate divided by 12) and n total monthly payments (your term in years times 12), the payment is M = principal × r ÷ (1 − (1 + r)−n). If the rate is zero, the payment is simply the principal divided by the number of months. We then simulate the loan month by month: each month, interest is charged on the remaining balance, the rest of your payment reduces the principal, and we roll those numbers up into yearly totals for the schedule.
Educational estimate, not financial advice — see our disclaimer.
A worked example
Suppose you borrow $250,000 at 6% over 30 years. The monthly rate is 0.5% (6 ÷ 12), and there are 360 payments. Plugging into the formula gives a payment of about $1,499 a month. Over 360 months that adds up to roughly $539,600 in total — meaning you pay close to $289,600 in interest, more than the original loan amount. In the very first month, about $1,250 of that payment is interest and only around $249 chips away at the principal. By the final year, almost the entire payment goes to principal because the balance — and therefore the interest charged on it — has shrunk so much.
Why early payments are mostly interest
Interest is charged on whatever you still owe. Early in the loan your balance is at its largest, so the interest portion of each payment is large and the principal portion is small. As you slowly pay the balance down, the interest charged each month falls and a bigger slice of your fixed payment attacks the principal. This is why the principal and interest bars in the chart cross over time, and why making extra payments early in the loan saves far more interest than the same payment made years later. To explore that, try our mortgage payoff calculator.
Tips to pay less interest
- Shorten the term — a 15-year loan carries a higher monthly payment but a far smaller total interest bill than a 30-year loan.
- Make extra principal payments — even a small amount added each month early on can shave years and thousands off the loan.
- Shop the rate — a fraction of a percent on the rate moves the total interest by a surprising amount over decades.
- Pay biweekly — half-payments every two weeks add up to one extra full payment a year.
Want to compare loan options side by side? Our loan calculator makes it easy to test different amounts, rates and terms.