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
Which formula does this tool use for the payment?
This tool uses payment = P × r ÷ (1 − (1 + r)^−n), where P is the loan amount, r is the annual rate divided by 12 and n is years × 12. The payment is level, falls at the end of each month, and interest is charged monthly on whatever balance is outstanding. With the defaults ($250,000, 6.5%, 30 years) the result is $1,580.17 a month.
How is the month 1 split worked out?
Month 1 interest is the starting loan amount × the annual rate ÷ 12, and month 1 principal is the payment minus that interest. For the default loan that is $1,354.17 of interest and $226.00 of principal. Only the first month is shown; the tool does not print the remaining 359 rows or a balance after any given month.
Why is the early part of a long loan mostly interest?
Interest is a percentage of the balance, and the balance is at its highest on day one. Because the payment is level, whatever is not interest reduces the balance, so the principal share grows a little each month. A shorter term raises the payment but moves the split: on the same $250,000 at 6.5%, a 15-year term puts $823.60 of the first payment towards principal instead of $226.00.
What happens with a 0% rate or a term of 0?
At 0% the payment is the loan amount divided by the number of months, interest is $0.00 and every payment is principal; $250,000 over 30 years gives $694.44. A loan amount or term of 0 cannot produce a payment, so the tool shows n/a instead of an infinite or blank figure.
Does the result include taxes, insurance or fees?
No. The figures are principal and interest only. Property tax, home insurance, mortgage insurance, closing costs, origination fees and any late-payment charges are all outside the calculation, so a lender’s monthly bill for a mortgage can be noticeably higher than the number shown here.
Can I include extra payments or a changing rate?
No. The tool assumes every payment equals the calculated amount and the rate never moves. Extra principal, a rate reset on an adjustable loan, a payment holiday or an interest-only period would each change the totals, and none of them can be entered.
Why might my lender’s figures differ by a few cents?
The total cost is the unrounded payment multiplied by the number of payments, shown to two decimals. A lender usually rounds each payment to the cent and adjusts the last one, so totals can differ slightly. Some loans also calculate interest daily or by actual days in the month, which this monthly model does not reproduce.
Do the rates in the examples reflect today’s market?
No. The 6.5% default and every rate in the examples are only inputs chosen to show the arithmetic. Real rates, fees and loan rules change, and your lender’s written disclosure governs what you actually pay.
Amortization: how a level payment divides into interest and principal
The payment formula and its timing
A level-payment loan is priced so that the present value of all payments equals the amount borrowed. The tool computes P × r ÷ (1 − (1 + r)^−n) with r equal to the annual rate divided by 12 and n equal to years × 12, and it assumes each payment is made at the end of a month. The defaults of $250,000 at 6.5% over 30 years give a payment of $1,580.17, total interest of $318,861.22 and a total cost of $568,861.22.
Worked example: shortening the term
Run the same $250,000 at 6.5% over 15 years and the payment rises to $2,177.77, but total interest drops to $141,998.31 and the total cost to $391,998.31. The first payment shows why: interest is still $1,354.17 because the balance and rate are unchanged, so the extra payment goes straight to principal, which becomes $823.60 instead of $226.00. These figures come from running the calculator with fixed inputs, and they describe the arithmetic only, not any offer you may receive.
How the rate changes the split
Holding the amount and term fixed isolates the effect of the rate. The table uses a $100,000 loan over 20 years, and the rate is the only input that changes between rows. At the highest rate the first payment is almost entirely interest, while at the lowest rate a larger slice reduces the balance from the start.
| Annual rate | Monthly payment | Total interest | Month 1 interest | Month 1 principal |
|---|---|---|---|---|
| 4% | $605.98 | $45,435.28 | $333.33 | $272.65 |
| 8% | $836.44 | $100,745.62 | $666.67 | $169.77 |
| 12% | $1,101.09 | $164,260.67 | $1,000.00 | $101.09 |
Zero-rate and zero-term inputs
A rate of exactly 0% is respected rather than replaced by a default. The payment becomes the loan divided by the number of months, so $250,000 over 30 years is $694.44 with no interest at all. A term of 0 years has no meaningful payment, so the tool reports n/a instead of an infinite number.
What sits outside this calculation
Only principal and interest are modelled. Property tax, insurance, mortgage insurance, fees, extra payments and rate changes are not, and only the first month is broken down rather than a full schedule. Treat the output as a way to compare structures, since rates, fees and rules change and the lender’s disclosure and schedule are what govern the real loan.
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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 →