Loan Amortization Calculator with Schedule
| # | Payment | Principal | Interest | Balance |
|---|
Amortization Calculator
An amortization calculator shows you how a fixed-rate loan is paid off over time, breaking each payment into its principal and interest components. It is one of the most important tools for understanding any major loan.
Conversion Formula
Monthly payment: M = P × [r(1+r)^n] / [(1+r)^n - 1]. For each month: Interest = Remaining Balance × monthly rate; Principal = M - Interest; New Balance = Old Balance - Principal.
Step-by-Step Examples
$200,000, 6.5%, 30 years = $1,264.14/month
Total paid: $455,088.98; Total interest: $255,088.98
$100,000, 4%, 15 years = $739.69/month
Total paid: $133,143.74; Total interest: $33,143.74
$50,000, 8%, 5 years = $1,013.82/month
Total paid: $60,829.20; Total interest: $10,829.20
History
The word "amortization" comes from the Latin "mors" (death) - meaning to kill off a debt over time. Modern amortization schedules became standard with the creation of the 30-year fixed mortgage by the Federal Housing Administration in the 1930s.
Common Use Cases
- Mortgage planning
- Auto loan payoff tracking
- Business loan analysis
- Understanding early payoff savings
- Comparing loan offers
Frequently Asked Questions
What is an amortization schedule?
An amortization schedule is a complete table of periodic loan payments showing how much of each payment goes to principal versus interest, and the remaining balance after each payment.
Why do early payments have more interest?
Interest is calculated on the outstanding balance each period. Early on the balance is highest, so interest is highest. As you pay down principal the interest portion shrinks and the principal portion grows with each payment.
How do extra payments affect the schedule?
Extra payments reduce the principal balance faster, which lowers the interest charged on future payments. Even one extra payment per year can cut years off a 30-year mortgage and save thousands in interest.
What is the difference between fixed and adjustable rate loans?
A fixed-rate loan keeps the same interest rate and payment throughout the term, making it easy to plan. An adjustable-rate loan (ARM) starts with a fixed period then resets periodically, which can increase or decrease payments.
Can I use this for a mortgage?
Yes. Enter the loan amount (home price minus down payment), the annual mortgage rate, and the term in years (typically 15 or 30). The schedule will show every monthly principal and interest payment.