💰 Finance
Amortization Calculator
Use this free amortization calculator to get fast, accurate results.
📝 Your Assumptions
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An amortization calculator shows exactly how much of each monthly payment goes toward principal versus interest over the life of a loan. Enter your loan amount, interest rate, and term to see your monthly payment, total interest, and total amount paid. It's essential for comparing mortgage, auto, and personal loan offers before you sign.
How to Use This Calculator
Follow these five steps to get accurate amortization results for any loan.
1
Enter the loan amount
Type the full amount you're borrowing, such as $400,000 for a mortgage or $35,000 for a new car. Don't include your down payment or trade-in value—only the financed amount. For a $400,000 home with 20% down, enter $320,000.
2
Input the annual interest rate
Enter the rate as a percentage, like 6.5 for a 6.5% APR. Use the rate from your loan estimate, not a teaser rate. A 0.5% difference on a $400,000 loan changes your monthly payment by about $125.
3
Choose the loan term
Select the number of years from the dropdown—common terms are 15, 20, or 30 years for mortgages and 3 to 7 years for auto loans. A longer term lowers your monthly payment but increases total interest. For example, a 30-year term on $400,000 at 6.5% costs over $500,000 in interest alone.
4
Review your monthly payment
The calculator displays your fixed monthly principal and interest payment. This does not include property taxes, homeowners insurance, or HOA fees. For a $400,000 loan at 6.5% for 30 years, the monthly payment is $2,528.27.
5
Compare total interest and total paid
Look at the total interest and total paid figures to see the true cost of the loan. On that same $400,000 loan, you'll pay $510,177.20 in interest and $910,177.20 total. Try different rates or terms to see how much you can save.
What Your Results Mean
Each output tells you something different about the cost and structure of your loan.
Monthly Payment
This is the fixed amount you'll pay every month toward principal and interest. It stays the same for the entire loan term unless you refinance. On a $400,000 loan at 6.5% for 30 years, it's $2,528.27.
Total Interest
This is the sum of all interest charges over the life of the loan—the lender's profit. For a $400,000 loan at 6.5% for 30 years, you'll pay $510,177.20 in interest, which is more than the amount borrowed.
Total Paid
This is the loan amount plus total interest—the full cost of financing. On that $400,000 loan, the total paid is $910,177.20. It shows why a lower rate or shorter term can save you six figures.
Amortization Schedule
This is the month-by-month breakdown of how each payment splits between principal and interest. Early payments are mostly interest; later payments are mostly principal. In month one of a $400,000 loan at 6.5%, $2,166.67 goes to interest and only $361.60 to principal.
Principal vs. Interest
Principal reduces your loan balance; interest is the cost of borrowing. In the first year of a 30-year mortgage, about 86% of your payments go to interest. By year 20, that flips—most of your payment hits principal.
Term Length Impact
A shorter term means higher monthly payments but far less interest. A 15-year $400,000 loan at 6.5% has a $3,484.66 monthly payment but only $227,238.80 total interest—a savings of $282,938.40 versus the 30-year option.
Key Terms
Amortization
The process of paying off a loan through scheduled, equal payments over time. Each payment covers both interest and a portion of the principal.
Principal
The original amount of money you borrowed, separate from interest. On a $400,000 mortgage, the principal is $400,000.
Interest Rate
The annual percentage a lender charges you to borrow money. A 6.5% rate on $400,000 means you pay $26,000 in interest in the first year alone.
Loan Term
The length of time you have to repay the loan in full. Common mortgage terms are 15 or 30 years; auto loans are typically 3 to 7 years.
Amortization Schedule
A table showing every payment over the loan's life, broken down by interest, principal, and remaining balance. It reveals how your balance drops month by month.
❓ Frequently Asked Questions
The calculator uses the standard amortization formula: M = P × [r(1+r)^n] / [(1+r)^n – 1]. P is the loan amount, r is the monthly interest rate (annual rate divided by 12), and n is the total number of payments (years × 12). For a $400,000 loan at 6.5% for 30 years, r is 0.005417 and n is 360. Plugging those in gives a monthly payment of $2,528.27. That payment covers both principal and interest. It does not include property taxes, homeowners insurance, or PMI. If you want a full monthly housing cost estimate, use our mortgage calculator to add those expenses. The formula assumes a fixed interest rate and no extra payments. If you make additional principal payments, your loan will be paid off faster and you'll pay less total interest than the calculator shows.
Amortization front-loads interest because your loan balance is highest at the start. Interest is calculated on the remaining balance each month. On a $400,000 loan at 6.5%, the monthly interest in month one is $400,000 × (0.065 / 12) = $2,166.67. Your payment is $2,528.27, so only $361.60 goes to principal. By month 12, the balance has dropped slightly, and the interest portion is about $2,142. By year 15, roughly half your payment goes to principal. By year 25, most of it does. This is why making extra principal payments early saves so much: even $100 extra in month one eliminates future interest on that $100 for the remaining 359 months. Use our loan calculator to see how extra payments change your payoff date and total interest.
Even a small rate drop saves a lot over 30 years. On a $400,000 loan, compare 6.5% versus 6.0%. At 6.5%, the monthly payment is $2,528.27 and total interest is $510,177.20. At 6.0%, the payment drops to $2,398.20 and total interest falls to $463,352.80. That's a savings of $130.07 per month and $46,824.40 over the life of the loan. A full 1% drop—from 6.5% to 5.5%—saves $218.99 per month and $78,836.40 total. The savings are even more dramatic on larger loans. For a $600,000 loan, 1% lower saves over $118,000. Shopping multiple lenders and negotiating your rate is one of the highest-return moves you can make. Our mortgage calculator lets you compare rates side by side.
A 15-year mortgage has higher monthly payments but dramatically lower total interest. On a $400,000 loan at 6.5%, the 30-year option costs $2,528.27 per month and $510,177.20 in total interest. The 15-year option costs $3,484.66 per month but only $227,238.80 in total interest—a savings of $282,938.40. That's a difference of $956.39 per month. The 15-year also builds equity faster, which matters if you plan to sell or borrow against your home. However, the higher payment can strain your budget. A common rule is to keep housing costs under 28% of gross monthly income. If a 15-year payment exceeds that, a 30-year loan with extra principal payments gives you flexibility. Use our amortization calculator to compare both terms with your actual loan amount.
Extra principal payments reduce your balance immediately, which lowers the interest charged in every following month. On a $400,000 loan at 6.5% for 30 years, adding $200 per month to the $2,528.27 payment pays off the loan in about 24 years and 5 months instead of 30 years. Total interest drops from $510,177.20 to roughly $386,000—a savings of over $124,000. Even a one-time $5,000 payment in year one saves about $23,000 in interest and shortens the term by 10 months. To maximize the benefit, specify that extra payments go to principal, not to next month's payment. Some lenders charge prepayment penalties, so check your loan agreement. Our loan calculator can model extra payments and show your new payoff date.
No. This calculator shows principal and interest only. Your actual monthly housing payment typically includes property taxes, homeowners insurance, and possibly PMI and HOA fees. On a $400,000 home, property taxes might run $400 per month and insurance $150, adding $550 to the $2,528.27 principal-and-interest payment. That brings the true monthly cost to about $3,078. If you put less than 20% down, PMI could add another $150 to $250 per month. These costs vary by location and lender. To estimate your full monthly payment including taxes and insurance, use our mortgage calculator. For auto loans, the amortization calculator is more accurate since taxes and registration are usually paid upfront, not rolled into the monthly payment.
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