Amortization Calculator
See a loan pay itself down: the monthly payment, the balance at the end of every year, and how much of each year went to interest. Add an extra payment and watch the schedule shorten.
Why early payments feel like they do nothing
Amortization front-loads interest by construction: each month's interest is the current balance times the monthly rate, so in the early years — when the balance is biggest — most of your payment is interest. Nothing is rigged; it is arithmetic. The schedule below the form shows the balance at every year-end and the interest accumulated, which is the honest picture of a loan's life.
Balance after k payments = P(1 + r)k − payment × ((1 + r)k − 1) ÷ r
Example: $300,000 at 6% over 30 years: payment $1,798.65. After 12 payments the balance is $296,315.96 — a year of payments, $21,583.80 sent, and the balance fell only $3,684.04. The other $17,899.76 was interest.
Extra payments attack the expensive years
Because interest is charged on the balance, every extra dollar of principal removes interest from every remaining month. Add even $100 a month in the form and watch the payoff year and total interest move — the effect is largest in the loan's first decade.
How this is calculated
The payment is the standard level-payment formula: loan × r ÷ (1 − (1 + r)−n), r = nominal annual rate ÷ 12, n = months. The schedule then applies that payment month by month — interest on the opening balance first, the rest to principal — with any extra payment added to principal monthly. Yearly rows snapshot the balance and cumulative interest each December. No intermediate rounding; only displayed figures are rounded.
Frequently asked questions
Why is so much of my early payment interest?
Interest each month equals balance × monthly rate. The balance starts at its maximum, so the interest share starts at its maximum and declines as the balance does. It is the same formula in month 1 and month 300 — only the balance changed.
Does an extra payment shorten the term or lower the payment?
On a standard fixed loan it shortens the term: the payment stays the same and the loan ends earlier, because the extra goes entirely to principal. (Lowering the payment instead requires a recast, which some lenders offer for a fee.)
What is the difference between amortization and a payment schedule from my lender?
None in method — your lender's schedule is produced by this same arithmetic. Small differences can appear from payment dates within the month and their rounding to cents each month.
Can this schedule handle a loan that is not a mortgage?
Yes — the mathematics is identical for auto, personal and business loans with monthly payments. The dedicated calculators add each loan type's fees and extras.
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