Loan Amortization Schedule Calculator
Amortization Calculator
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Total Payments
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Total Interest
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Payment Breakdown
Loan Balance Over Time
Amortization Schedule
| Year | Interest | Principal | Ending Balance |
|---|
The amortization calculator shows your complete loan payment schedule: every monthly payment broken into the interest portion and principal portion, plus the remaining balance after each payment. It reveals exactly how much of your early payments go to interest versus principal — a breakdown that surprises many new homeowners. Understanding your amortization schedule is key to making smart decisions about extra payments, refinancing, and the true long-term cost of a loan.
How Amortization Works
Each monthly payment covers that month's interest first. Whatever remains after the interest charge reduces the principal balance. Because interest is calculated on the remaining balance, the interest portion shrinks slightly each month as the balance falls. This shift is slow at first and accelerates in the later years. In the early years of a 30-year mortgage, over 75% of each payment goes to interest. By year 25, that flips and over 75% goes to principal.
Interest portion = Remaining balance × Monthly rate Principal portion = Monthly payment - Interest portion New balance = Old balance - Principal portion Monthly rate = Annual rate / 12
Example: $300,000 balance at 7% APR. Monthly rate = 0.07/12 = 0.5833%. Month 1 interest = $300,000 × 0.005833 = $1,750. If payment is $1,996, principal paid = $246. New balance = $299,754.
Amortization Schedule Sample (First 12 Months)
On a $300,000 mortgage at 7% over 30 years (monthly payment: $1,996): The table below shows how little of each payment goes to principal in the early months.
| Month | Payment | Interest | Principal | Remaining Balance |
|---|---|---|---|---|
| 1 | $1,996 | $1,750 | $246 | $299,754 |
| 3 | $1,996 | $1,749 | $247 | $299,259 |
| 6 | $1,996 | $1,747 | $249 | $298,612 |
| 12 | $1,996 | $1,743 | $253 | $297,051 |
| 24 | $1,996 | $1,728 | $268 | $293,879 |
| 60 (yr 5) | $1,996 | $1,684 | $312 | $288,061 |
| 120 (yr 10) | $1,996 | $1,587 | $409 | $271,888 |
| 180 (yr 15) | $1,996 | $1,436 | $560 | $245,771 |
| 360 (yr 30) | $1,996 | $12 | $1,984 | $0 |
Effect of Extra Payments on Amortization
Extra payments applied to principal have a compounding effect: reducing the balance earlier shrinks every future interest charge. The earlier you make extra payments, the more interest you save. Even modest additional monthly payments ($100-$200 extra) can cut years off a 30-year mortgage and save tens of thousands of dollars in interest.
| Extra Monthly Payment | Years to Payoff | Total Interest Saved | Payoff Years Saved |
|---|---|---|---|
| $0 (standard) | 30 years | $0 | 0 |
| $100 extra | 27.5 years | $28,000 | 2.5 years |
| $200 extra | 25.3 years | $51,000 | 4.7 years |
| $500 extra | 21.1 years | $98,000 | 8.9 years |
| $1,000 extra | 17 years | $143,000 | 13 years |
Comparing Loan Terms: 15-Year vs 30-Year
The same loan amount at the same rate results in dramatically different total interest costs depending on the term. A 15-year mortgage has a higher monthly payment but builds equity faster and costs far less in total interest. The choice between terms depends on your cash flow, financial goals, and what you would do with the monthly savings from a 30-year mortgage.
$300,000 loan at 7% interest: 15-year: Monthly payment = $2,696. Total interest = $185,280. 30-year: Monthly payment = $1,996. Total interest = $418,527. Difference: $700/month more, but saves $233,247 in total interest.
If the $700/month saved on a 30-year mortgage is invested at 7% return, it could outperform the mortgage interest savings. Run both scenarios to compare.
Frequently Asked Questions
What is an amortization schedule?⌄
An amortization schedule is a complete table of every loan payment, showing the date, total payment amount, how much goes to interest, how much reduces the principal, and the remaining balance after that payment. For a 30-year mortgage, this is a 360-row table. Reviewing it reveals how the interest-to-principal ratio shifts over the loan's life and helps you calculate the exact balance at any point in time, which is useful for refinancing decisions and extra payment planning.
Why do I pay so much interest at the start of a mortgage?⌄
Interest is calculated on the outstanding balance each month. At the start of the loan, the balance is at its maximum, so the interest charge is also at its maximum. As each payment chips away at the principal (very slowly at first), the interest portion of each subsequent payment decreases by a tiny amount. This gradual shift is why the amortization schedule looks front-loaded with interest and why making extra payments in the early years of a mortgage has such an outsized impact on total interest saved.
How much interest do you pay over 30 years on a $300,000 mortgage?⌄
At 7% interest over 30 years, total interest paid is approximately $419,000 on a $300,000 loan, bringing the total cost to about $719,000. At 6%, total interest drops to about $347,000. At 5%, it drops to about $280,000. The difference between a 5% and 7% rate on a $300,000 mortgage is about $139,000 over 30 years — which is why even a small rate reduction at the time of purchase or refinancing is significant.
Does extra payment reduce the principal?⌄
Yes, as long as you designate the extra amount as principal reduction. Most mortgage servicers allow extra principal payments online or by marking a check "apply to principal." If you just pay extra without designation, the servicer may apply it toward future scheduled payments rather than reducing the principal balance. Confirm the correct procedure with your specific lender or servicer. Even one extra payment per year (a 13th payment) can cut 4-5 years off a standard 30-year mortgage.
What is negative amortization?⌄
Negative amortization occurs when a loan payment is smaller than the monthly interest charge. The unpaid interest is added to the loan balance, causing the balance to grow over time rather than shrink. This happened with some adjustable-rate mortgages (ARMs) and option-ARM products during the 2000s housing bubble. Negative amortization loans can result in owing significantly more than the original loan amount. Standard fixed-rate mortgages always fully amortize — every payment is large enough to cover interest and reduce principal.