Loan Amortization Calculator
Calculate the total interest you will pay over the life of any fixed-rate loan and see how each payment splits between principal and interest. Use this before taking out a mortgage, car loan, or personal loan.
About this calculator
Amortization is the process of paying off a loan through equal periodic payments, each covering both interest and principal. The monthly payment is determined by the standard amortization formula: M = P × (r × (1+r)^n) / ((1+r)^n − 1), where P is the principal, r is the monthly interest rate (annual rate / 100 / 12), and n is the total number of payments (term in years × 12). Total interest paid is then calculated as: Total Interest = M × n − P. Early payments are mostly interest; as the balance shrinks, more of each payment goes to principal. This formula is used by every mortgage lender worldwide to construct the amortization schedule—the full table showing each payment broken down by interest, principal, and remaining balance.
How to use
You're borrowing $200,000 at 6% annual interest for 30 years. Step 1 — Monthly rate r: 6 / 100 / 12 = 0.005. Step 2 — Number of payments n: 30 × 12 = 360. Step 3 — Monthly payment M: $200,000 × (0.005 × 1.005^360) / (1.005^360 − 1) = $200,000 × (0.005 × 6.0226) / (6.0226 − 1) = $200,000 × 0.005996 = $1,199.10. Step 4 — Total paid: $1,199.10 × 360 = $431,676. Step 5 — Total interest: $431,676 − $200,000 = $231,676. Enter $200,000, 6%, and 30 years into the calculator to confirm.
Frequently asked questions
How much total interest do you pay on a 30-year mortgage versus a 15-year mortgage?
The difference is dramatic. On a $300,000 loan at 6%, a 30-year mortgage costs roughly $347,515 in total interest, while a 15-year mortgage at a typical 5.5% rate costs about $142,745—a saving of over $200,000. The 15-year monthly payment is higher ($2,453 vs. $1,799), but the interest saving is substantial. Many homeowners split the difference by making extra principal payments on a 30-year loan to shorten their effective term without being locked into a higher required payment.
What happens to your amortization schedule if you make extra principal payments?
Every extra dollar paid toward principal reduces the balance on which future interest is calculated, shortening the loan term and reducing total interest paid. For example, paying an extra $200/month on a $300,000, 30-year, 6% mortgage shortens the term by roughly 6 years and saves about $80,000 in interest. The lender recalculates your remaining schedule each time an extra payment is made. Always verify with your lender that extra payments are applied to principal, not held as pre-paid future installments.
Why do early mortgage payments consist mostly of interest?
Each payment's interest portion is calculated as the outstanding balance multiplied by the monthly rate. At the start of a 30-year $200,000 loan at 6%, your balance is at its maximum, so the first month's interest is $200,000 × 0.005 = $1,000—most of the $1,199 payment. As principal slowly reduces, the interest share shrinks and the principal share grows. This is why the first half of a mortgage term pays off far less principal than the second half—a concept known as front-loading of interest.