How this calculator works
Each month, interest is the remaining balance times the rate divided by 12; the rest of the payment reduces principal. Any extra amount goes straight to principal, which lowers future interest and ends the loan sooner. Interest and time saved compare the schedule with and without the extra payment.
Worked example
With the example values below: Monthly principal & interest, $2,093.44 (30-year schedule). Change any number above to run your own.
What you enter
| Input | Example |
|---|---|
| Loan amount | $340,000 |
| Interest rate | 6.25% |
| Loan term | 30 years |
| Extra principal / month | $0 |
What amortization means
An amortizing loan is repaid with equal payments that cover both interest and principal, so the balance reaches zero at the end of the term. Each month, interest is calculated on the remaining balance; the rest of the payment reduces principal.
Because the balance is highest at the start, early payments are mostly interest. On a $340,000 loan at 6.25% for 30 years, the payment is about $2,093. In month one, about $1,771 is interest and only $322 is principal. By about year 19, more of each payment goes to principal than to interest.
How to read an amortization schedule
Each row of the schedule shows one period: the payment, how much went to interest, how much to principal, and the balance left. Cumulative columns show total interest and principal paid so far.
Use it to answer practical questions: how much equity you'll have when you plan to sell, when your balance drops below 80% of the home's value so you can cancel PMI, or how much interest a refinance would save on the remaining balance.
What extra payments do
Any extra amount you pay goes straight to principal. That lowers the balance future interest is charged on, so the savings compound. On the $340,000 loan above, an extra $200 a month saves roughly $100,000 of interest and ends the loan about six years early.
Make sure your servicer applies extra payments to principal, not to the next month's payment. Biweekly payments, half the monthly amount every two weeks, add up to one extra payment a year and have a similar effect.
Amortization beyond mortgages
The same math applies to auto loans, personal loans and student loans: fixed payments, interest on the remaining balance, principal rising over time. Interest-only loans and HELOCs during the draw period don't amortize, which is why their payment jumps when repayment starts; see the HELOC calculator.
Frequently asked questions
What is an amortization schedule?
A table showing every payment on a loan, split into interest and principal, with the balance remaining after each payment. It shows how equity builds and how much total interest you'll pay.
Why is so much of my mortgage payment interest?
Interest is charged on the remaining balance, which is largest at the start of the loan. As the balance falls, the interest portion shrinks and more of each payment goes to principal.
How do extra payments affect amortization?
Extra principal payments lower the balance immediately, which reduces all future interest and shortens the loan. An extra $200 a month on a $340,000, 6.25% 30-year loan saves roughly $100,000 in interest.
How do I calculate loan amortization?
Find the fixed payment with M = P × r(1 + r)^n ÷ ((1 + r)^n − 1). Each month, interest is the balance times the monthly rate; principal is the payment minus that interest; the new balance is the old balance minus principal.
Does paying extra shorten my loan or lower my payment?
On a standard mortgage it shortens the loan; the required payment stays the same. To lower the payment instead, some lenders offer a recast after a large lump-sum payment, usually for a small fee.
Grow what this calculator projects.
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Estimates for planning only, not financial, tax or legal advice. Tax tools use 2026 federal figures (brackets, $16,100 / $32,200 standard deduction, $19,000 gift exclusion, $15M lifetime exemption). Rates shown as defaults are examples; replace them with quotes you actually receive.