Free Loan Amortization Calculator

Calculate your monthly payment, total interest, and year-by-year amortization schedule for any loan amount, interest rate, and term.

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What is this calculator for?

You're about to sign closing papers on a $345,000 mortgage at 6.75% for 30 years. The monthly payment line says $2,237. You know your payment, but you don't know how that $2,237 gets divided between principal and interest, when the split flips, or how much total interest you'll pay over the life of the loan. The amortization calculator answers those questions and shows the year-by-year breakdown of where every dollar of your payment goes.

Amortization is the process of spreading loan repayment across a fixed term, with each payment containing both interest and principal. The mechanics are not intuitive. Early payments are mostly interest: on a 30-year mortgage at 6.75%, your very first payment is roughly $1,941 of interest and $296 of principal — about 87% interest. By year 15, it's closer to 60% interest. By year 28, it flips to mostly principal. This front-loaded interest structure is a feature of how mortgage math works, not a bank conspiracy — but it has major implications for refinancing, prepayment, and selling a home in the first 5-10 years of ownership.

This tool computes the full schedule for any fixed-rate loan: mortgages, auto loans, student loans (federal and private), personal loans, HELOCs in the fixed-rate phase. The math is universal across loan types; only the inputs change. The output tells you what you're really agreeing to when you sign the papers.

How to use this calculator

Enter the loan amount as the principal — the amount actually borrowed. For a home purchase, that's the home price minus your down payment minus any cash for closing costs that gets rolled into the loan. For a refinance, that's the new loan balance, which may include cash-out amounts above the existing mortgage payoff. For an auto loan, that's the financed amount (vehicle price minus down payment minus trade-in equity, plus any rolled-in fees or extended warranties).

Annual interest rate is the APR on the loan, not the monthly rate. For mortgages, this is the "interest rate" line on the closing disclosure (not the APR — the APR includes some fees, which makes it a tiny bit higher than the simple interest rate). For auto loans, it's the APR on the contract. For student loans, the rate you were assigned when the loan was originated (federal loans set rates annually by Congress; private loans vary by lender and credit).

Pick the loan term — 10, 15, 20, 25, or 30 years. For mortgages, the 30-year fixed is the US default, with the 15-year as the most common alternative. Shorter terms reduce total interest dramatically: a 15-year mortgage at the same rate as a 30-year typically charges a slightly lower rate, has higher monthly payments (about 35-45% higher), and costs less than half the total interest. The right term depends on your monthly cash flow, your other investment options, and your tax situation.

Understanding your results

The primary outputs: monthly payment (principal + interest only — does not include property tax, insurance, HOA, or PMI on a mortgage), total interest over the life of the loan, and total paid (loan amount + total interest). The breakdown shows the year-by-year split between principal paid, interest paid, and remaining balance.

The total interest number is usually the shocker. A $345,000 mortgage at 6.75% for 30 years has a monthly payment of $2,237 and a total interest cost of $460,330. Over 30 years you pay $805,330 to borrow $345,000 — meaning the cost of the money is more than the value of the house. Inflation softens this in real-dollar terms (the $2,237 you pay in 2055 is worth less than $2,237 today), but the nominal cost is huge.

The shorter-term comparison is instructive. The same $345,000 at 6.25% (typical 15-year rate) for 15 years has a monthly payment of $2,956 — about $720 more per month than the 30-year — and total interest of $187,165. Cutting the term in half cuts the total interest by 59%. The trade is the higher monthly payment. People who can afford the 15-year payment often choose to take the 30-year anyway and invest the difference; the math works in their favor if they actually invest the difference at returns above the mortgage rate. The math fails if they spend the difference instead of investing it, which is what most people actually do.

The biennial extra-payment trick: making one extra payment per year (or splitting your monthly payment into biweekly halves, which results in 13 monthly equivalents per year) typically shaves 4-6 years off a 30-year mortgage. The reason is the front-loaded interest structure: every dollar of extra principal you pay early in the loan eliminates years of future compounding interest. The same extra dollar paid in year 25 of a 30-year loan saves you almost nothing — it's already late in the schedule. This is why financial coaches push extra-principal payments specifically in the first decade of a mortgage.

A worked example

Emma and Joon are first-time buyers in Sacramento. They're under contract on a $478,000 condo, putting 10% down ($47,800), financing $430,200 at 6.625% on a 30-year fixed. The calculator runs the schedule.

Monthly P&I: $2,754. Total interest over 30 years: $561,239. Total paid: $991,439. To clarify: they're financing $430,200 and paying back $991,439 — the interest exceeds the loan amount. Year 1, of their $33,053 in payments, $28,402 goes to interest and only $4,651 to principal. By the end of year 5, balance is $402,690 — they've paid $165,265 in payments and only $27,510 has gone to principal.

The instructive scenario: their loan officer pitches a 15-year option at 6.25%, monthly P&I $3,693. They can technically afford it but it would tighten their cash flow considerably. Total interest on the 15-year: $234,506. They'd save $326,733 in interest but pay $939/month more. Over the 15 years they'd save: ($939 × 180 months) = $169,020 of payment difference, with $326,733 of interest savings. Net financial win: about $158K — substantial.

They model a third path: stick with the 30-year mortgage but commit to one extra principal payment per year ($2,754 extra annually). The calculator with that schedule shows the loan paying off in 25 years instead of 30, saving about $108,000 in interest. Less aggressive than the 15-year, but doesn't require a $939 increase in fixed obligation. The flexibility — they can skip the extra payment in a bad year — matters to them more than the marginal extra savings of the strict 15-year.

They choose the 30-year with the annual extra-payment commitment. Their reasoning: 30-year locks in a fixed obligation they're sure they can meet; the extra payment is a "stretch goal" they can defer if life throws a curveball. The 15-year would have been mathematically optimal if they were certain of stable income and no emergencies; the 30-year-with-extra is the right balance of conservatism and acceleration for their actual situation.

Related resources

For housing-specific math beyond loan amortization (including PITI, PMI, and the rent-versus-buy decision), see Mortgage Calculator and Buy vs Rent. For evaluating whether you qualify for the loan in the first place, the DTI Ratio Calculator. For credit card debt, where the same amortization logic applies but at much higher rates, the Credit Card Payoff Calculator. For the long-run effect of investing the cash flow that a shorter mortgage term saves, see the Compound Interest Calculator. The CFPB's homebuying guide covers federal mortgage protections, closing-cost categories, and standard loan-disclosure documents in plain English.

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Frequently asked questions

What is amortization?

Amortization is the process of spreading loan repayments across a fixed term. Each payment covers both interest and principal. Early in the loan, most of each payment goes to interest; near the end, most goes to principal. This front-loaded interest structure is why paying extra toward principal early saves a disproportionate amount of total interest.

How can I pay off my mortgage faster?

The most effective strategies: (1) Make one extra payment per year — this typically shaves 4-6 years off a 30-year mortgage. (2) Apply windfalls (tax refund, bonus) to principal. (3) Round up monthly payments — even an extra $50-100/month matters. (4) Refinance to a 15-year term if rates are favorable. Every dollar of early principal repayment eliminates future compounding interest.

What is the interest vs. principal ratio in early payments?

On a 30-year mortgage at 6.5%, your first payment is roughly 81% interest and 19% principal. By year 15 it is closer to 55% interest / 45% principal. By year 28 it flips to mostly principal. This is why the amortization schedule is so important — it shows exactly when your money stops mostly financing the bank and starts building equity.

How can I pay off my mortgage faster?

Four strategies in descending effectiveness. (1) Refinance to a shorter term (15 or 20 years) when rates allow — this forces the higher payment and locks in lower total interest. (2) Make one extra full payment per year — shaves 4-6 years off a 30-year loan and saves tens of thousands in interest. (3) Switch to biweekly payments (half your monthly amount every two weeks, which results in 26 half-payments = 13 monthly equivalents per year) — same effect as one extra payment annually, automated. (4) Apply windfalls (tax refund, bonus, inheritance) to principal — every dollar paid early eliminates years of future interest at that loan's rate. Strategies 2-4 require no refinancing, no rate change, and can be started or stopped at any time.

When is the interest/principal split 50/50?

On a 30-year mortgage at 6.75%, the crossover happens around month 252 (year 21). On a 30-year at 4%, the crossover is around month 174 (year 14.5) — lower rates flip the split earlier. On a 15-year mortgage at 6.25%, the crossover is around month 100 (year 8). This is why selling or refinancing in the first 5-7 years of a mortgage feels financially painful: you've paid a lot in payments but most went to interest, so your equity is small. The mortgage starts working for you (mostly building equity, not paying interest) in the back half of the term.

Is it better to pay extra on the mortgage or invest the money?

Compare the mortgage rate to expected investment returns after tax. If your mortgage is 6.75% and you have a tax-advantaged retirement account (401(k), IRA) with expected returns of 7-10% real, the math slightly favors investing — but the mortgage payoff is a guaranteed return matching the rate, while investment returns are variable. Most planners recommend a hybrid: capture full 401(k) match first (free money), pay off credit cards (24%+ guaranteed return), build emergency fund, then split surplus between retirement contributions and mortgage prepayment. Pure mortgage payoff is most attractive when rates are 6%+ and the alternative is taxable brokerage investing (which only nets ~5-7% after taxes on equivalent returns).

Why doesn't my actual mortgage payment match the calculator?

Because most mortgage payments include more than principal and interest. The full payment (often called PITI) includes Property tax, Interest, Taxes (already counted in PITI's I, actually), and Insurance — plus PMI if you put down less than 20%, plus HOA if applicable. The calculator only shows P&I. Your real monthly payment is typically 20-30% higher than the P&I shown here once taxes and insurance are added. The escrow portion (taxes and insurance) varies by state, county, and home value; budget realistically by adding 1.0-1.5% of home value annually for property tax plus $1,200-2,500 for insurance plus $300-1,800/year for PMI if applicable.

Should I refinance my mortgage?

The standard rule of thumb: refinancing makes sense when the new rate is at least 0.5-1.0 percentage points below your current rate AND you'll stay in the home long enough to recoup closing costs (typically 2-5% of loan balance). Run two scenarios in the calculator: (1) keep current loan to payoff, total interest; (2) refinance now, new loan total interest plus closing costs. The breakeven point — when refinance savings exceed closing costs — should arrive within your expected remaining time in the home. For people who plan to move in 3 years, refinancing rarely pencils out. For people staying 10+ years with a meaningful rate drop, it almost always does.