Amortization Calculator
See how your loan payments are distributed between principal and interest over time. Our amortization chart shows your loan balance declining across the full term.
Calculator
Monthly Payment
$1,073.64
Total Payment
$386,511.57
Total Interest
$186,511.57
How It Works
Amortization is the process of spreading out a loan into a series of fixed payments over time. Each payment covers both interest charges and principal repayment, with the interest portion decreasing and principal portion increasing over the life of the loan.
In the early years of a loan, most of your payment goes toward interest. As the balance decreases, more of each payment goes toward reducing the principal. This is why making extra payments early in your loan term can save significant interest.
Our calculator visualizes this amortization process, helping you understand how your payments are applied over time.
The Formula
M = P × [r(1+r)^n] / [(1+r)^n - 1] | Interest Portion = Balance × r | Principal Portion = M - InterestEach month: interest is calculated on the remaining balance. The principal payment is the total payment minus interest. The balance decreases by the principal payment amount.
Example
Scenario: You take out a $200,000 mortgage at 5% for 30 years.
Result: Your monthly payment is $1,074. Over 30 years, you'll pay $386,512 total with $186,512 in interest.
Amortization Insight: In year 1, about 80% of your payments go toward interest. By year 20, over 70% goes toward principal. An extra $100/month would save $49,000 in interest and shorten your loan by 8 years!