Amortization Calculator
Generate full monthly loan payment amortization schedules.
This amortization calculator, also useful as a mortgage amortization calculator or loan amortization calculator, generates a full amortization table showing how each monthly payment splits between principal and interest over the life of a loan. It works for any fixed-rate installment loan, including a house amortization calculator use case for a mortgage or a general loan payment amortization calculator for auto loans and personal loans.
Enter the loan amount, interest rate, and term, and the calculator builds the month-by-month schedule instantly.
Worked Calculation Examples
| Scenario | Result | Calculation Step |
|---|---|---|
| $300,000 mortgage at 6.5% over 30 years | $1,896.20/month | r = 0.065/12 = 0.0054167, n = 360. First payment: interest = $300,000 × 0.0054167 = $1,625.00; principal = $1,896.20 − $1,625.00 = $271.20. |
| $20,000 auto loan at 7% over 5 years | $396.02/month | r = 0.07/12 = 0.0058333, n = 60. First payment: interest = $20,000 × 0.0058333 = $116.67; principal = $396.02 − $116.67 = $279.35. |
How an Amortization Table Is Built
Each row of an amortization schedule shows a payment number, the interest portion (current balance times the periodic rate), the principal portion (the rest of the fixed payment), and the remaining balance after that payment. Because the balance shrinks every month, the interest portion shrinks too, and progressively more of each level payment goes toward principal. This front-loaded interest structure is a direct mathematical consequence of charging interest on the outstanding balance each period - since the balance is largest at the very start of the loan, the earliest payments are mostly interest, and only as the balance shrinks does the same fixed payment size begin covering a larger share of principal.
Why Early Payments Are Mostly Interest
In the first years of a long-term loan like a 30-year mortgage, the majority of each payment covers interest rather than reducing the balance, simply because the outstanding balance - and therefore the interest charged on it - is at its highest early on. This is why making extra principal payments early in a loan saves disproportionately more total interest than making the same extra payment later in the term.
Common Amortization Mistakes
The most common error is comparing a 'biweekly payment' schedule to a monthly one without accounting for the extra full payment it produces each year (26 biweekly half-payments equal 13 monthly payments, not 12). A second common mistake is forgetting that this schedule covers principal and interest only - a real mortgage payment (often abbreviated PITI) usually also includes property tax and insurance escrow, which don't amortize and don't shrink over time. A third is assuming a fixed-rate schedule applies to an adjustable-rate loan, where the rate - and therefore the whole schedule - can reset partway through the term.
Sources & Methodology
The level-payment amortization formula used here is the standard method described in the U.S. Truth in Lending Act (Regulation Z) disclosures that lenders are required to provide, and is the same formula used in financial calculators and spreadsheet functions like Excel's PMT. It assumes a fixed interest rate and equal monthly payments for the full term, with no fees, points, or escrow included.
How to Use the Amortization Calculator
- Open the Amortization Calculator and enter the values requested in the input fields.
- Check the units, percentages, dates, or time periods before reading the answer.
- Review the instant result and adjust any value to compare another scenario.
- Use the formula, example, and FAQs below to understand how the amortization calculator works.
Frequently Asked Questions
What is a loan amortization schedule?
It is a table showing every payment over the life of a loan, broken into the principal and interest portions of each payment along with the remaining balance after it.
How do I calculate an amortization schedule with extra payments?
Apply any extra amount directly to the principal each month before recalculating interest for the next period - this reduces the balance faster and shortens the total loan term, which this calculator can model when you add an extra payment amount.
Why does more of my payment go to interest early in the loan?
Interest is calculated on the current outstanding balance, which is highest at the start of the loan, so the early payments carry a larger interest share; the principal share grows every month as the balance falls.
How do I use this amortization calculator?
Enter the known values, review the units or settings, and the calculator updates the result instantly. The formula and example on this page show how the answer is produced.
What does the Amortization Calculator calculate?
Generate full monthly loan payment amortization schedules. It is designed for fast browser-based calculations without sign-up, downloads, or manual spreadsheet setup.
What formula does this amortization use?
The formula is: M = P × [r(1+r)^n] ÷ [(1+r)^n − 1]. M is the fixed monthly payment, P is the original loan principal, r is the monthly interest rate (the annual rate divided by 12), and n is the total number of monthly payments over the loan term. This is the standard level-payment formula lenders use for fixed-rate installment loans - it's derived by requiring that a constant payment M, discounted at rate r over n periods, exactly pays off principal P. Once M is fixed, each period's interest is simply the current balance times r, and the principal portion is whatever's left of M after interest - which is why the split between the two shifts every month even though M itself never changes.
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Last updated: September 29, 2026.