Amortization Calculator
See a full loan amortization schedule.
Details
Monthly payment
$1,896.20
360 payments
Total interest
$382,633
Total paid
$682,633
This builds a full amortization schedule for a loan, showing how each payment splits between interest and principal.
It gives the monthly payment, the total interest, and the balance remaining after every payment.
What amortization means
Amortization is the process of paying off a loan through equal payments, where each payment covers the interest owed and puts whatever is left towards the balance.
The payment never changes, but what it does changes completely. Interest is charged on the balance, and the balance starts at its largest, so early payments are almost all interest.
On a $320,000 mortgage at 6.5%, the first $2,022.62 payment is $1,733.33 of interest and $289.28 of principal. Only 14% of it reduces what you owe. The crossover, where principal finally exceeds interest, does not arrive until year 19.
The payment is identical throughout. Only the split moves, and it moves slowly for a very long time.
What to enter
- Loan amount
- The principal borrowed, after any down payment.
- Interest rate
- The annual rate. The schedule uses a twelfth of it each month.
- Loan term
- Years to repay. A shorter term raises the payment and cuts the total interest sharply.
- Extra payments
- Anything above the required payment goes straight to principal, which is why extra payments are so effective early on.
What this assumes
This is principal and interest only. A mortgage payment usually also includes property tax and insurance through escrow.
The rate is assumed fixed. An adjustable-rate loan re-amortises whenever the rate changes.
How to calculate an amortization schedule
Work out the fixed payment first, then walk the schedule month by month.
- P
- Loan amount
- i
- Monthly rate, the annual rate divided by 12
- n
- Total number of payments
Calculate the fixed payment. It stays the same for the whole term, which is what amortisation means.
Work out this month's interest. Current balance times the monthly rate. At 6.5%, that is the balance times 0.005417.
The rest reduces the balance. Payment minus interest is the principal portion. Subtract it from the balance.
Repeat with the new balance. A slightly smaller balance means slightly less interest next month, so slightly more principal. That shift compounds across the term.
See a worked example: how long it takes to reach the crossover
- Loan
- $320,000
- Rate
- 6.5% over 30 years
Payment: $2,022.62 a month.
Month 1: interest $1,733.33, principal $289.28. Just 14% of the payment reduces the debt.
Principal only exceeds interest at month 233, which is year 19.4 of a 30-year loan.
Total interest across the term: $408,142, which is more than the amount borrowed.
$408,142 of interest, crossover at year 19
Frequently asked questions
- Why is so much of my early payment interest?
Because interest is charged on the outstanding balance, and the balance is at its largest at the start.
On a $320,000 loan at 6.5%, the first month's interest alone is $1,733.33. Whatever the payment is above that goes to principal, and early on that is not much.
- When does principal exceed interest?
Later than most people expect. On a 30-year loan at 6.5% it is month 233, which is more than 19 years in.
A higher rate pushes it later still, and a shorter term brings it forward dramatically. On a 15-year loan at the same rate the crossover arrives at month 53, in year 4.4.
- How much do extra payments save?
A great deal, because every extra dollar goes entirely to principal and removes all the future interest that dollar would have generated.
The effect is strongest early, when the balance is largest. The same extra payment made in year 1 saves considerably more than in year 20.
- What is negative amortization?
When a payment does not even cover the interest, so the unpaid interest is added to the balance and the debt grows despite the payments.
It happens with some deferred or income-driven repayment structures. If a loan can negatively amortise, that is the most important thing to know about it.
- Does a biweekly payment plan actually help?
Yes, but not for the reason usually given. Paying half the payment every two weeks means 26 half-payments, which is 13 full payments a year instead of 12.
It is the extra payment doing the work, not the frequency. You could achieve exactly the same by paying an extra twelfth each month, without paying a service to set it up.
- Why does total interest exceed the amount borrowed?
Because the balance stays high for a long time and interest accrues on it every month for thirty years.
$320,000 at 6.5% costs $408,142 in interest, which is 128% of the loan. Shortening the term is the most effective lever: the same loan over 15 years costs far less than half as much interest.
Problems people actually run into
Assuming half the term means half the balance repaid
After 15 years of a 30-year loan, well over half the original balance is still outstanding, because those years were spent mostly paying interest.
This matters if you plan to move. Someone selling at year 7 has built far less equity from payments than they expected, and most of what they have came from price appreciation instead.
Overlooking how much a shorter term saves
A 15-year loan has a noticeably higher payment, and buyers reject it on that basis without checking the total.
The interest saved is not proportional to the term; it is far larger, because the balance falls much faster from the very first payment. Compare the totals before deciding on the monthly figure alone.
Results are estimates for general information only and are not professional financial, medical, or legal advice. Read our full disclaimer.
Last updated: September 4, 2026
