This amortization calculator shows your monthly payment and how each year of payments is split between interest and principal until the loan is paid off. It works for mortgages, car loans and personal loans with fixed rates.
What is amortization?
Amortization is paying off a loan with equal regular payments. Each payment covers that month’s interest first, and the rest reduces the balance. Early on, most of each payment goes to interest; as the balance falls, more goes to principal.
Monthly payment formula
Payment = P × r ÷ (1 − (1 + r)−n)
P is the loan amount, r is the monthly interest rate (yearly rate ÷ 12) and n is the number of monthly payments.
Worked example
A $200,000 loan at 6.5% for 30 years has 360 payments of about $1,264.14. Over the full term you pay about $255,089 in interest, more than the amount borrowed.
Frequently asked questions
How can I pay less interest?
A shorter term, a lower rate or extra payments toward principal all cut total interest. Even small extra payments early in the loan have a large effect because they reduce the balance that interest is charged on.
Does this include taxes and insurance?
No. It shows principal and interest only. For a full mortgage payment with property tax and insurance, use the mortgage calculator.