Loan Amortization Calculator
Free mortgage and loan amortization calculator. Calculate your monthly mortgage payment, total interest cost, and view a full repayment schedule. Works for home loans, car loans, personal loans, and any fixed-rate loan. Enter your loan amount, interest rate, and term to see your payoff date and amortization graph.
| Monthly Payment | Payments | Principal | Interest Cost | Total Cost | Payoff Date |
|---|---|---|---|---|---|
Yearly Amortization Schedule
| Year | Principal | Interest | Balance |
|---|
Monthly Amortization Schedule
| Payment | Date | Principal | Interest | Balance |
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More about Loan Amortization
How Amortization Works
An amortized loan has a fixed monthly payment that covers both principal and interest. Early in the loan term, most of each payment goes toward interest. Over time, the interest portion decreases and the principal portion increases as the outstanding balance shrinks.
The Amortization Formula
The fixed monthly payment M is calculated as:
M = P * [r(1+r)^n] / [(1+r)^n - 1]
Where P = loan principal, r = monthly interest rate (annual rate / 12), and n = total number of payments.
Interest vs. Principal Over Time
On a $300,000 mortgage at 6% for 30 years, the monthly payment is $1,798.65. In the first payment, $1,500 goes to interest and only $298.65 to principal. By the final payment, nearly the full amount goes to principal. The total interest paid over 30 years is $347,514.57.
Strategies to Reduce Interest Cost
- Shorter loan term: A 15-year mortgage has higher monthly payments but dramatically lower total interest. The same $300,000 loan at 6% costs $155,682.74 in total interest over 15 years, saving $191,831.83 compared to 30 years.
- Extra payments: Even small additional payments toward the principal reduce the total interest paid and shorten the loan term.
- Biweekly payments: Paying half the monthly amount every two weeks results in 26 half-payments (13 full payments) per year instead of 12, accelerating payoff.
Common Loan Types
- Fixed-rate mortgage: Interest rate stays the same for the entire term. Predictable payments.
- Adjustable-rate mortgage (ARM): Rate adjusts periodically based on a benchmark index. Often starts lower than fixed rates.
- Auto loans: Typically 3 to 7 year terms. Shorter terms mean less interest paid.
- Personal loans: Usually unsecured with higher rates. Terms of 1 to 7 years.