How the Mortgage Amortization Calculator Works
Amortization is the process of paying off a loan in equal payments over time. Every payment has two parts: interest, which is the cost of borrowing, and principal, which reduces what you owe. An amortization schedule is the table that shows that split for every payment, along with the balance that remains. The Mortgage Amortization Calculator builds that schedule for you.
What you enter
- Property or loan amount and down payment: the price, and the money you pay up front. The rest is the loan.
- Interest rate and term: the yearly rate, and the number of years to repay.
- First payment month and year: so each row of the schedule has a date, and you can see when the last payment falls.
- Extra payment (optional): money you add each month, to see how it changes the schedule.
- Schedule view: a summary by year, or every single month.
Step 1: the monthly payment
The loan is the price minus the down payment. The monthly rate r is the yearly rate divided by 12. With n monthly payments, the payment is found with the standard formula, where P is the loan:
payment = P x r x (1 + r)^n / ((1 + r)^n - 1)
The payment is the same every month. With a fixed rate, that never changes.
Step 2: building each row
Every row of the schedule follows the same three steps:
interest = balance x monthly rate principal = payment - interest new balance = balance - principal
Because the interest is charged on the current balance, it is largest in the first month and gets smaller as the balance falls. The payment stays the same, so the principal part grows a little each month. The calculator repeats this until the balance reaches zero. If you pay extra, the extra amount is added to the principal in each row.
A worked example
You borrow $280,000 (a $350,000 home with $70,000 down) at 6.5% for 30 years, with the first payment in January 2026. The payment is $1,769.79. Here are the first two rows:
| # | Month | Payment | Principal | Interest | Balance |
|---|---|---|---|---|---|
| 1 | Jan 2026 | $1,769.79 | $253.12 | $1,516.67 | $279,746.88 |
| 2 | Feb 2026 | $1,769.79 | $254.49 | $1,515.30 | $279,492.38 |
| 360 | Dec 2055 | $1,769.79 | $1,760.26 | $9.53 | $0.00 |
In the first payment, only $253.12 reduces the loan, and $1,516.67 is interest. In the last payment, almost all of it is principal. Over the 360 payments you pay $357,124.57 in interest, so the total is $637,124.57.
The schedule by year
| Year | Interest | Goes to the loan | Balance at year end |
|---|---|---|---|
| 5 | $17,181 | $4,056 | $262,111 |
| 10 | $15,629 | $5,609 | $237,373 |
| 15 | $13,482 | $7,756 | $203,166 |
| 20 | $10,512 | $10,725 | $155,863 |
| 25 | $6,407 | $14,831 | $90,452 |
| 30 | $729 | $20,508 | $0 |
Chart: what you still owe
Start ████████████████████████████████████████ $280,000 Year 5 █████████████████████████████████████ $262,111 Year 10 ██████████████████████████████████ $237,373 Year 15 █████████████████████████████ $203,166 Year 20 ██████████████████████ $155,863 Year 25 █████████████ $90,452 Year 30 (paid off)
The balance falls slowly at first and faster later. After 5 years, you have repaid only about $18,000 of the $280,000.
What extra payments do
An extra $300 a month is added to the principal in every row. The balance drops faster, so less interest is charged each month. On the loan above, the schedule ends in May 2046 instead of December 2055. That is 245 payments instead of 360, or 115 fewer, and it saves $131,512 in interest.
How to use a schedule
- Know your balance at any point, for example when you plan to sell or refinance.
- See the tax picture. The yearly interest total is what you might be able to deduct, depending on your country's rules.
- Plan extra payments. Early extra payments do the most, because the balance, and the interest on it, is largest then.
- Check your lender's statement. The numbers should match yours to within a few cents.
What this calculator does not include
- Property tax, insurance, mortgage insurance and HOA fees. They are paid on top of the payment shown.
- Adjustable-rate loans, where the rate and payment change over time.
- Small rounding differences. Lenders round each payment to the cent, so the last payment can differ slightly.
This tool gives an estimate for general information only. It is not financial advice. Your lender's statement has the exact figures.