Amortization Schedule Calculator
Generate a full amortization table showing monthly principal, interest, and remaining balance over your entire loan term.
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How It Works
An amortization schedule shows exactly how each monthly payment is split between principal and interest over the life of a loan. Early payments go mostly toward interest, while later payments pay down more principal. Understanding this breakdown helps you see the true cost of borrowing and evaluate strategies like extra payments or refinancing.
The Formula
Interest_i = Balance_i x r
Principal_i = M - Interest_i
Balance_{i+1} = Balance_i - Principal_i
Variables
- M — Fixed monthly payment amount
- P — Original loan principal (amount borrowed)
- r — Monthly interest rate (annual rate / 12)
- n — Total number of monthly payments (years x 12)
Worked Example
A $300,000 loan at 6.5% for 30 years has a monthly payment of $1,896.20. Over 30 years you pay $682,633 total, meaning $382,633 goes to interest. In month 1, $1,625 is interest and only $271 is principal. By month 360, $10 is interest and $1,886 is principal.
Practical Tips
- In a 30-year mortgage, you typically pay more interest than principal during the first 20 years of payments.
- Making one extra payment per year can shave 4-5 years off a 30-year mortgage and save tens of thousands in interest.
- Shorter loan terms (15 vs 30 years) have higher monthly payments but dramatically lower total interest costs.
- Refinancing to a lower rate resets your amortization schedule, so compare total remaining interest, not just the monthly payment.
- Review your amortization schedule annually to track how much equity you are building versus how much is going to interest.
Frequently Asked Questions
Why does so much of my early payment go to interest instead of principal?
Interest is calculated on the outstanding balance each month. When your balance is high at the start of the loan, the interest charge is large, leaving only a small portion for principal. As you pay down the balance over time, the interest portion shrinks and the principal portion grows. This is the fundamental structure of amortization.
What happens to my amortization schedule if I make extra payments?
Extra payments go directly to principal, reducing your outstanding balance faster. This means less interest accrues in future months, and you pay off the loan sooner. Even small extra payments early in the loan can save thousands in interest because they reduce the balance that compounds over many years.
Is a 15-year mortgage always better than a 30-year?
A 15-year mortgage saves significantly on total interest and typically has a lower rate, but the monthly payment is much higher. If the higher payment strains your budget or prevents you from investing elsewhere, a 30-year with occasional extra payments may be a better fit. The right choice depends on your cash flow and financial goals.
Does refinancing restart my amortization schedule?
Yes. When you refinance, you take out a new loan, and the amortization clock resets. Even if you get a lower rate, restarting at month 1 of a new 30-year term means you are back to paying mostly interest. To compare fairly, look at total interest remaining on your current loan versus total interest on the new loan, including closing costs.
How do adjustable-rate mortgages (ARMs) affect amortization?
With an ARM, the interest rate changes at set intervals (e.g., every year after an initial fixed period). Each rate adjustment recalculates your monthly payment based on the remaining balance and new rate. This makes your amortization schedule unpredictable after the fixed period ends, which is why ARMs carry more risk than fixed-rate loans.