Amortization Calculator
Generate an amortization schedule with optional extra payments.
| # | Date | Payment | Extra | Principal | Interest | Balance |
|---|---|---|---|---|---|---|
| Run a calculation to see the schedule. | ||||||
Use this Mortgage Loan Amortization Calculator to estimate your fixed monthly principal-and-interest payment and generate a month-by-month repayment schedule. You can also include recurring or one-time extra principal payments to estimate potential interest savings and an earlier payoff date.
Important: This calculator estimates principal and interest only. A complete mortgage payment may also include property taxes, homeowners insurance, mortgage insurance, HOA dues, and other charges.
Mortgage Amortization Formula
For a standard fixed-rate, fully amortizing loan, first convert the annual interest rate to a monthly rate:
Monthly interest rate = annual interest rate ÷ 12 ÷ 100
The scheduled monthly principal-and-interest payment is:
M = P × [r(1 + r)n] ÷ [(1 + r)n − 1]
Where:
- M = scheduled monthly payment
- P = original loan principal
- r = monthly interest rate
- n = total number of monthly payments
Each payment period is then calculated as follows:
Monthly interest = current balance × monthly interest rate
Scheduled principal = monthly payment − monthly interest
Ending balance = current balance − scheduled principal − extra principal
Interest is normally higher near the beginning of an amortized loan because it is calculated from a larger outstanding balance. As the balance decreases, less of the scheduled payment goes to interest and more goes to principal.
Worked Example
Suppose you borrow $280,000 at a fixed annual interest rate of 6.5% for 30 years.
Total monthly payments = 30 × 12 = 360
Monthly interest rate = 6.5% ÷ 12 ≈ 0.5417%
Using the amortization formula:
Scheduled monthly principal and interest ≈ $1,769.79
The first month’s estimated interest is:
$280,000 × 0.0054167 ≈ $1,516.67
The scheduled principal paid in the first month is:
$1,769.79 − $1,516.67 ≈ $253.12
The estimated remaining balance after the first scheduled payment is:
$280,000 − $253.12 = $279,746.88
If you also pay an extra $200 toward principal that month:
Total principal reduction = $253.12 + $200 = $453.12
Estimated ending balance = $279,546.88
Reducing the balance earlier can lower the interest charged in later months and shorten the estimated payoff period.
How to Read the Amortization Schedule
- Payment: The scheduled principal-and-interest payment.
- Extra: An optional additional amount applied to principal.
- Principal: The scheduled portion that reduces the loan balance.
- Interest: The borrowing cost calculated for that payment period.
- Balance: The estimated principal remaining after the payment.
Important Notes
- Enter the mortgage interest rate rather than APR when calculating the scheduled amortization payment.
- The calculator assumes a fixed interest rate, regular monthly payments, and monthly compounding.
- Extra-payment estimates assume the additional amount is applied directly to principal after that month’s interest is calculated.
- Confirm with your loan servicer how extra payments are applied and whether any prepayment restrictions or penalties exist.
- The selected start date labels the schedule and estimates the payoff month; it does not change the payment formula.
- Rounding each monthly payment can cause small differences between this estimate and a lender’s official amortization schedule.
- Taxes, insurance, PMI, escrow adjustments, HOA dues, late fees, closing costs, and lender-specific charges are not included.
- Adjustable-rate, interest-only, balloon, negatively amortizing, and other nonstandard loans may require different calculations.