Mortgage Amortization Calculator

Mortgage Amortization Calculator Guide

Amortization is the process of paying off a loan through regular, equal installments over a set term. With a fixed-rate home loan, every payment covers the interest that has built up since the last one, and the rest reduces the balance you owe. Seeing how that split changes over time shows why early payments reduce the balance so slowly, and how much interest a home loan costs in total.

This mortgage amortization calculator works as a mortgage payment calculator and a mortgage interest calculator. Enter the loan amount, interest rate and term to get the monthly payment, the total interest and a year-by-year mortgage amortization schedule showing principal paid, interest paid and the remaining balance. It is free, works on any device and requires no sign-up.

How a Home Loan Amortization Schedule is Calculated

Amortization Formula

Building the Schedule, Month by Month:

1. Interest for the month: remaining balance × monthly interest rate
2. Principal for the month: fixed monthly payment − interest for the month
3. New balance: previous balance − principal for the month
4. Repeat for every month until the balance reaches zero. The table above adds up each group of 12 months into one row per year.

How to Use This Calculator:

1. Enter the loan amount you borrow (after any down payment).
2. Enter the interest rate per year.
3. Enter the loan term in years (1 to 60).
4. Read the results: the payment, total interest and schedule update as you type.

Sample Amortization Snapshot ($240,000 loan, 6.5%, 30 years)

The monthly payment is $1,516.96. Here is how the split between principal and interest changes in selected years:

Year	Principal Paid	Interest Paid	Remaining Balance
Year 1	$2,683	$15,521	$237,317
Year 5	$3,477	$14,727	$224,666
Year 10	$4,808	$13,396	$203,463
Year 15	$6,648	$11,556	$174,142
Year 20	$9,193	$9,011	$133,597
Year 25	$12,712	$5,491	$77,530
Year 30	$17,579	$625	$0

Calculated with this calculator's method. The principal portion grows and the interest portion shrinks every year, which is the core mechanic of amortization.

How Amortization Works: Principal vs. Interest

1. The Principal Balance

The principal is the amount you borrowed and still owe. As the schedule moves on, a larger part of each payment goes toward principal.

2. The Interest Cost

Interest is calculated each month on the remaining balance. Because the balance is highest at the start, early interest is highest, which is why extra principal payments made early have a larger effect than ones made late.

3. The Fixed-Rate Structure

With a fixed-rate mortgage the monthly payment stays the same, while the split between interest and principal shifts every month.

Impact of Extra Monthly Payments (for illustration)

The table below shows what happens to a $240,000, 30-year loan at 6.5% if you add a fixed extra amount to principal every month. It assumes the lender applies the extra to principal and the rate stays fixed. This calculator does not include an extra-payment option.

Extra Monthly Payment	Payoff Time	Interest Saved
$0 (baseline)	30.0 years	$0
+$100 / month	25.2 years	$58,351
+$200 / month	21.8 years	$96,270
+$300 / month	19.4 years	$123,334
+$500 / month	16.0 years	$159,920

Comparison: 15-Year vs. 30-Year Mortgage

Feature	15-Year Fixed	30-Year Fixed
Monthly Payment	Higher	Lower
Interest Rate	Often lower	Often higher
Total Interest Paid	Much less	Much more
Equity Build-up	Faster	Slower in the early years

Common Amortization Mistakes to Avoid

1. Assuming Extra Payments Automatically Reduce Principal

Confirm with your lender that additional payments are applied to principal and not simply held as a prepayment of the next installment.

2. Ignoring Prepayment Penalties

Some loans charge a fee for paying off early. Check your loan agreement before making large extra payments.

3. Refinancing Without Running the Numbers

Refinancing starts a new amortization schedule. If you are already many years into a loan and refinance into a new 30-year term, you may pay more total interest even with a lower payment. Compare total costs, including closing costs and the break-even point.

Ways to Pay Off a Mortgage Faster

• Bi-weekly payments: paying half the monthly amount every two weeks makes 26 half-payments, equal to 13 monthly payments a year, if your lender applies them that way.
• Round up your payment each month and send the difference to principal.
• Apply windfalls such as tax refunds or bonuses to principal.
• Refinance to a shorter term if your budget allows a higher payment and the costs make sense.
• Ask about recasting, which re-calculates your payment after a large lump-sum payment. Not every lender offers it.

Conclusion

An amortization schedule shows where every dollar of your mortgage payment goes and how slowly the balance falls at first. Try different loan amounts, rates and terms in the calculator above to compare options, and ask your lender for the official schedule before you commit.