Amortization Calculator

The same payment, a shifting split

A fixed-rate loan has one payment amount for its whole life, but interest is charged on the balance that remains. Early on the balance is large, so most of the payment is interest and only a sliver reduces principal. As the balance falls, the interest share shrinks and principal grows. The crossover — the month where principal first exceeds interest — comes surprisingly late on a long mortgage, often past the one-third mark.

Why extra payments are so powerful early

An extra payment goes entirely to principal, and it removes not just that dollar but all the future interest that dollar would have accrued for the rest of the term. That is why the same extra amount saves far more in year one than in year twenty. The schedule recalculates the payoff date and total interest with your extra payment included.

Amortization is not the same as the interest rate

Two loans at the same rate but different terms have very different total interest: a 15-year loan costs more per month but far less overall than a 30-year loan, because the balance falls faster and less interest accrues. The monthly payment is only half the story — the total paid, shown above, is what actually leaves your pocket.

What a plain schedule leaves out

This models principal and interest only. A real mortgage payment usually also carries property tax, homeowners insurance and, on low-down-payment loans, mortgage insurance — often bundled into an escrow portion that can be larger than you expect. Adjustable-rate loans break the schedule entirely once the rate resets, and a payment that seems fixed can jump. For a full housing cost, add taxes and insurance on top of the payment shown here, and treat an ARM schedule as valid only until the first reset.

Frequently Asked Questions