Amortization Calculator
Inspect the exact principal-interest breakdown for every payment cycle across the life of debt.
Parameters & Inputs
Summary & Breakdown
Complete Amortization Schedule
| Period | Starting Balance | Principal | Interest | Ending Balance |
|---|
About the Amortization Calculator
Loan amortization outlines the financial journey of a debt from funding to full retirement. Every fixed-rate installment is an exact blend of accrued interest and equity principal repayment.
In the first several years of a loan, your payments are overwhelmingly consumed by interest. As the principal drops, interest declines and more of your money reduces the balance.
This amortization calculator shows you year-by-year and month-by-month schedules while revealing how additional principal payments accelerate your debt payoff.
How the Calculations Work
At each payment cycle, Interest = Remaining Balance * (r/12). Principal Portion = Total Monthly Payment - Interest. The remaining balance decreases by the principal portion.
Interest_m = Balance * (r/12), Principal_m = PMT - Interest_m, Balance_new = Balance - Principal_m
Variables & Definitions
- PMT: Regular monthly installment
- r: Annual interest rate as decimal
- Balance: Remaining outstanding loan principal
On a $200,000 loan at 6.0% for 15 years: Payment 1 has $1,000.00 in interest and $687.71 in principal. Payment 120 (Year 10) has $486 in interest and $1,201 in principal.
Key Terms Explained
Amortization Schedule
A complete table recording every periodic payment on an amortizing loan.
Front-Loaded Interest
The mechanical phenomenon where initial payments consist primarily of interest due to high starting principal.
Principal Paydown
The portion of a debt payment that directly reduces outstanding note balance.
Accelerated Amortization
Making additional principal payments to shorten total repayment duration and interest charges.
Practical Tips & Pitfalls to Avoid
Make principal-only payments
Ensure extra funds are designated explicitly for principal rather than prepaid future interest.
Refinance at lower rates
A 1% rate reduction significantly recalibrates your amortization schedule in your favor.
Review your annual statement
Verify that servicer statements match your calculated amortization schedule.
Inspect 15-year options
A 15-year schedule amortizes principal more than twice as fast as a 30-year schedule.
Frequently Asked Questions
Because interest is computed on the large starting principal balance. As you pay down balance over time, interest charges shrink.
Multiply balance by monthly interest rate (r/12) to find interest. Subtract that from your payment to get principal reduction.
Yes. On a 15-year $200,000 loan at 6%, an extra $100/mo pays off the loan over a year earlier and saves thousands in interest.
Only if you make extra principal payments, recapitalize, or modify the loan terms.
When payments do not cover accrued interest, causing unpaid interest to be added back to principal.