Amortization Calculator
Calculate your monthly mortgage or loan payment and see the full amortization schedule — how much goes to principal vs interest each month.
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How to use this calculator
M = monthly payment, P = loan principal, r = monthly interest rate, n = total number of payments.
- 1
Enter the total loan amount (home purchase price minus down payment for a mortgage).
- 2
Enter the annual interest rate you have been quoted.
- 3
Enter the loan term in years (typically 15 or 30 for mortgages).
- 4
See your monthly payment, total interest, and first-month breakdown.
Frequently asked questions
Why does so much of my early payment go to interest?
In the early years, your outstanding balance is large, so the interest portion (balance × monthly rate) is large. As you pay down principal, the interest portion shrinks. This is front-loaded amortization — standard for all fixed-rate loans.
How much do I save by making extra principal payments?
Significantly. On a $250,000 / 30-year / 6.5% loan, paying an extra $200/month saves over $70,000 in interest and cuts the loan term by about 7 years.
What is the difference between a 15-year and 30-year mortgage?
A 15-year mortgage has higher monthly payments (~35–45% more) but roughly half the total interest cost. At 6.5% on $250,000: 30-year total interest ≈ $321,000; 15-year ≈ $138,000 — a saving of ~$183,000.
Does PMI affect my payment?
Yes. If your down payment is below 20%, lenders typically require Private Mortgage Insurance (PMI), which adds $50–$200/month. This calculator shows principal and interest only. Add PMI, property taxes, and homeowner's insurance for the full PITI payment.
Amortization and mortgage payments explained
What is amortization?
Amortization is the process of paying off a loan through regular equal payments over time. Each payment covers both interest on the remaining balance and a portion of the principal. Early payments are mostly interest; later payments are mostly principal.
Fixed-rate vs adjustable-rate mortgages
A fixed-rate mortgage locks your interest rate for the entire term — predictable and easy to budget. An ARM (adjustable-rate mortgage) starts lower but adjusts periodically. ARMs suit buyers who plan to sell or refinance before the adjustment period.
Refinancing to save money
Refinancing replaces your existing mortgage with a new one, ideally at a lower rate. A 1% rate reduction on a $300,000 mortgage saves roughly $150–170/month. Factor in closing costs (typically 2–5% of the loan) and calculate your break-even month.
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Results are estimates for informational purposes only and do not constitute professional financial, medical, legal, or technical advice. Read full disclaimer →