# Amortization Calculator Build a full principal and interest amortization schedule for any loan to see exactly how each payment reduces your balance. --- - **Canonical URL:** https://dothecalculation.com/calculators/amortization-calculator - **Category:** Financial calculators - **Publisher:** Do The Calculation (https://dothecalculation.com) - **Cost:** Free, no account or sign-up required - **Privacy:** Runs entirely in the browser; inputs are never sent to a server - **Methodology:** https://dothecalculation.com/methodology - **Reviewed by:** Sheharyar Shahid, Data Analyst & Advanced Excel Specialist (DAE) (https://dothecalculation.com/about/team/sheharyar-shahid) --- ## Amortization Calculator — Full Principal and Interest Schedule Build a payment schedule that separates interest, principal, and remaining balance across the repayment term. - First payment split - Schedule preview - Balance curve ## What amortization means Amortization is the process of paying down a loan through scheduled payments. Each payment covers interest first, then reduces principal. Over time, the interest portion gets smaller and the principal portion gets larger. This calculator turns a loan amount, rate, and term into a monthly payment and schedule preview. It is useful when you need to understand not only the payment amount, but also how quickly the balance declines. ## How to Use This Calculator Enter the loan principal, the annual interest rate, and the loan term in years. The calculator returns the fixed monthly payment, total interest paid over the life of the loan, total amount paid, and the interest/principal split of the very first payment. ## Worked Example: $200,000 at 6.5% Over 30 Years Loan amount $200,000, annual interest rate 6.5%, term 30 years (360 monthly payments). Monthly payment: ≈ $1,264.14. Total interest paid over 30 years: ≈ $255,088.98. Total paid (principal + interest): ≈ $455,088.98 — more than double the original loan amount. First month's payment split: $1,083.33 goes to interest, only $180.80 goes to principal — illustrating how front-loaded a 30-year amortization schedule is toward interest in the early years. ## How to read the schedule The payment column shows the fixed monthly amount. The interest column shows the cost for that month, calculated from the current balance. The principal column shows how much of the payment reduces the balance. Early rows usually show more interest than principal. Later rows reverse that pattern. This is why extra principal payments made early in the loan can reduce future interest more dramatically. ## Formula explained The calculator first calculates the fixed payment using the amortizing loan formula. Then it loops month by month: monthly interest equals current balance times monthly rate, principal equals payment minus interest, and the new balance equals old balance minus principal. For zero-interest loans, the payment is simply principal divided by the number of months, and every payment goes to principal. ## The Payoff Impact of Extra Payments Adding a fixed extra amount to each monthly payment goes entirely toward principal, which compounds into large savings because every dollar of principal paid early stops accruing interest for the rest of the loan. On the same $200,000 loan at 6.5% for 30 years, adding just $200 extra to every monthly payment pays the loan off in about 250 months (roughly 20.8 years) instead of 360 months — over 9 years earlier — and cuts total interest paid from ≈ $255,088.98 down to ≈ $165,012.20, a savings of roughly $90,077. This is why even modest, consistent extra principal payments made early in a loan's life have an outsized effect on total interest paid compared to the same extra amount paid later in the term. ## Related Calculators Model different extra-payment and frequency scenarios in more detail with the [payment calculator](/calculators/payment-calculator), or if this is a mortgage specifically, get the full PITI picture with the [mortgage calculator](/calculators/mortgage-calculator). ## Frequently asked questions ### Why is principal low in the first payment? The first payment is calculated against the full loan balance, so interest is highest at the beginning. ### Does amortization show the payoff date? The full schedule indicates how many payments are required to reach a zero balance. The preview shows the first rows to keep the page readable. ### Can amortization help with refinancing decisions? Yes. It shows how much interest remains and how quickly principal is being reduced, which helps compare refinancing costs and savings. ### How does making an annual extra payment affect the amortization schedule? Making an extra payment annually applies directly to the principal balance. This reduces the outstanding balance, shortening the remaining term of the loan and saving you money on total interest charges. ### What is negative amortization, and how does it happen? Negative amortization occurs when your monthly payment is less than the interest charges accrued that month. The unpaid interest is added to the principal balance, causing the total amount you owe to increase over time. ### How does the amortization schedule differ between a 15-year and a 30-year mortgage? A 15-year mortgage has higher monthly payments, but a much larger share of each payment goes toward the principal from day one. A 30-year mortgage has lower payments, but early payments consist mostly of interest, resulting in higher lifetime interest costs. ### What is the difference between linear amortization and declining balance amortization? Linear amortization pays down principal in equal installments each period, meaning total payments decline over time. Declining balance amortization uses a fixed payment amount where the proportions of principal and interest shift dynamically each month. ### Can I recast my amortization schedule if I pay a large lump sum? Yes, many lenders offer loan recasting. If you pay a large lump sum toward your principal, the lender re-amortizes the remaining balance over the original remaining term, lowering your monthly payment without changing interest rate. ### How do closing costs affect the APR vs the interest rate on a schedule? The interest rate determines your monthly principal and interest payment. The APR (Annual Percentage Rate) includes both the interest rate and prepaid closing costs, representing the true annual cost of borrowing. ### What is the amortization of intangible assets, and how does it differ from depreciation? Amortization is the process of writing down the cost of intangible assets (like patents, copyrights, or goodwill) over their useful life. Depreciation applies to physical assets (like buildings, machinery, or vehicles). ### How do lenders calculate the exact daily interest portion in an amortization row? Daily interest is calculated by multiplying the outstanding principal by the interest rate, then dividing by 365 (or 360, depending on the day-count convention). That daily rate is multiplied by the days in the payment period. ### Does refinancing reset the amortization schedule? Yes. Refinancing replaces your current loan with a new one, resetting the amortization timeline. If you refinance into a new 30-year term after paying on a loan for 10 years, you reset the interest-heavy phase of the schedule. ## Related concepts - **Principal balance** — The remaining amount still owed on the loan. - **Interest portion** — The part of each payment paid to the lender for borrowing. - **Payoff timeline** — The number of scheduled payments required to fully repay the loan. ## Related guides - [Mortgage Amortization Schedule: Formula and Guide](https://dothecalculation.com/blog/finance/mortgage-amortization-schedule) — Learn how mortgage payments split between principal and interest, read an amortization schedule, and test loan terms with DTC calculators. - [Loan Payment Guide: Formula, Interest, and Total Cost](https://dothecalculation.com/blog/finance/loan-payment-guide) — Learn how fixed loan payments are calculated, why term length changes total interest, and how the DTC loan calculator matches amortization math. ## Related calculators - [Payment Calculator](https://dothecalculation.com/calculators/payment-calculator) — Find your exact monthly loan payment instantly from the loan amount, repayment term, and interest rate you enter into the tool. - [Mortgage Calculator](https://dothecalculation.com/calculators/mortgage-calculator) — Calculate monthly mortgage payments including principal, interest, property taxes, PMI, and home insurance to budget your home purchase. - [Rent vs Buy Calculator](https://dothecalculation.com/calculators/rent-vs-buy-calculator) — Compare the long-term costs of renting versus buying a home, including ownership expenses, equity growth, and opportunity cost. - [Loan Calculator](https://dothecalculation.com/calculators/loan-calculator) — Calculate loan payments, total interest cost, and the full payoff schedule for personal, auto, or business loans in seconds. - [Auto Loan Calculator](https://dothecalculation.com/calculators/auto-loan-calculator) — Estimate monthly car payments, total financing cost, and interest owed based on vehicle price, down payment, and loan term. - [Down Payment Calculator](https://dothecalculation.com/calculators/down-payment-calculator) — Plan the savings needed for a home down payment and see how it affects your loan amount and monthly mortgage payment size. --- _This calculator is for planning and education, not financial advice. Verify rates, taxes, fees, lender rules, and local requirements before making a borrowing decision._ --- _Source: [Do The Calculation](https://dothecalculation.com/calculators/amortization-calculator). Quote freely with attribution and a link to this page._