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Amortization Calculator

Generate an amortization schedule to see how your loan balance decreases over time.
Calculator
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Analysis
Interpretation of the current calculator output

Enter values to see detailed analysis and insights.

How to Use

Step-by-step instructions
  1. 1Enter the total loan amount.
  2. 2Input the annual interest rate.
  3. 3Provide the total loan term in years.
  4. 4Analyze how your loan balance amortizes (pays down) over the specified term.

Amortization Math

The amortization schedule allocates every monthly payment (M) into an interest portion and a principal paydown portion.
M = P[r(1+r)^n] / [(1+r)^n - 1]

Variables:

MFixed Monthly Payment
PPrincipal Loan Amount
rMonthly Interest Rate
nTotal number of payments

Example

Standard Amortization Example

Inputs:

Loan Amount:$250,000
Interest Rate:5.5%
Term:30 Years

Steps:

  1. 1.Determine monthly payment: $1,419.47
  2. 2.Month 1 Interest: $250,000 * (0.055/12) = $1,145.83
  3. 3.Month 1 Principal: $1,419.47 - $1,145.83 = $273.64
  4. 4.Month 2 Balance: $250,000 - $273.64 = $249,726.36
  5. 5.Repeat iteratively for 360 months.
Result:
$1,419.47 Monthly Payment ($261,010 total interest paid)

Frequently Asked Questions

What is amortization?

Amortization is the process of spreading out a loan into a series of fixed payments. While payments remain equal, the amount going to principal and interest changes over time.

Why do I pay so much interest early on?

Because interest is calculated against your remaining balance. Early in the loan, your balance is highest, so the interest portion of your payment is maximized.