📅Amortization Calculator

This loan amortization schedule calculator gives you the complete financial picture of any fixed-rate loan. Enter your loan amount, interest rate, and term to instantly see your monthly payment, total interest paid over the life of the loan, and a year-by-year breakdown of how your balance declines. You can also enter extra monthly payments to see exactly how much interest you save and how many years you shave off your payoff date.

How Loan Amortization Works: Principal vs Interest Breakdown

Every payment on an amortizing loan is split into two parts: the interest charge for that month and the principal reduction that shrinks your balance. In the early years of the loan, the interest portion is large because interest is calculated on the full remaining balance. Over time, as the balance falls, the interest portion of each payment shrinks and the principal portion grows. By the final payments, nearly the entire payment goes toward principal.

For a $300,000 mortgage at 7% over 30 years, the monthly payment is $1,996. Of the very first payment, $1,750 covers interest and only $246 reduces the balance. By year 25, the split has nearly reversed. This front-loading of interest is a fundamental feature of amortization and explains why you build equity slowly in the early years of a home loan.

Mortgage Amortization Calculator with Extra Payments: The Impact on Your Payoff

Extra payments are one of the most effective strategies available to mortgage borrowers. Every dollar of extra principal payment eliminates future interest charges on that amount, and the effective guaranteed return equals your mortgage interest rate. At a 7% mortgage rate, each extra dollar you pay down returns a guaranteed 7%, tax-free, with no market risk.

For a $300,000 mortgage at 7% over 30 years, paying just $200 extra per month saves approximately $87,000 in total interest and cuts the loan term by about 7 years. That single modest change converts a 30-year payoff into a 23-year payoff and saves nearly the equivalent of two full years of mortgage payments in interest costs. The amortization chart in this calculator shows the year-by-year impact visually, making the benefit immediately clear.

Extra payments do not reduce your required monthly payment on a standard fixed-rate mortgage. They reduce your balance faster, shortening the loan and cutting total interest. If you want your required payment permanently reduced, you would need to refinance or ask your lender about a mortgage recast, which some servicers offer for a fee.

When Investing Extra Money Beats Extra Mortgage Payments

The decision to make extra mortgage payments versus investing the same amount depends primarily on your mortgage rate versus your expected investment return. If your mortgage rate is 7% and your after-tax return on investments is expected to be higher, investing may build more total wealth. If your mortgage rate is 3 to 4%, the comparison clearly favors investing in a diversified portfolio with historical returns above that level. For borrowers with higher current mortgage rates, extra payments become more competitive with investing. Your risk tolerance, tax situation, and how much you value being completely debt-free all factor into this decision.

How to Read an Amortization Schedule: Amortization Calculator by Month and Year

The annual amortization bar chart produced by this calculator shows principal and interest paid in each year side by side. In the early years, the interest bars dominate. In the final years, the principal bars dominate. This visualization immediately explains several important financial realities:

• Why selling or refinancing early in a mortgage means you have paid mostly interest and built little equity
• Why paying extra in the early years of a loan saves dramatically more than paying extra later
• Why a 15-year loan feels more expensive monthly but builds equity and saves interest much faster
• Why refinancing from a 30-year to a new 30-year loan late in your mortgage can significantly increase total interest paid even at a lower rate

Reading the amortization schedule month by month, you can identify your loan balance at any point in time, which is useful for calculating home equity, evaluating a refinance, or understanding what you would net from a sale after paying off the mortgage.

The True Cost of a 30-Year Mortgage

First-time borrowers are often surprised by how much a mortgage costs in total. A $300,000 loan at 7% over 30 years has a monthly payment of $1,996, but the total of all payments is $718,560. Of that total, $418,560 is pure interest paid to the lender. The actual cost of the home is more than twice the purchase price once interest is included.

Comparing loan terms makes the difference striking. A 15-year mortgage at 6.5% on the same $300,000 carries a monthly payment of about $2,613, which is 31% higher, but the total interest paid falls to roughly $170,000. That is $248,000 less in interest costs over the life of the loan. The higher monthly payment is a real constraint, but the long-term savings are substantial for borrowers who can manage it.

Biweekly Payments: An Easy Extra Payment Strategy

One of the simplest ways to make extra mortgage payments without dramatically changing your budget is to switch to biweekly payments. Instead of making one full payment per month, you make half your payment every two weeks. Because there are 26 two-week periods in a year, this produces 26 half-payments, or 13 full payments, per year instead of 12. The equivalent of one extra full monthly payment per year reduces a 30-year mortgage by roughly 4 to 5 years and saves tens of thousands in interest, with no single payment feeling significantly larger than what you were already paying.