Mortgage Amortization Calculator

What this calculator is, and when to reach for it

Most mortgage tools answer one question: what is the payment? This one answers the more revealing question: where does that payment actually go, month after month, for as long as the loan runs? An amortization schedule is the full ledger of a loan. Every row is one payment, split into the part that covers interest and the part that genuinely reduces what you owe, with the balance that remains after it.

It is worth looking at once, properly, because the schedule contradicts almost everyone’s intuition. People assume a loan drains steadily, like a bath. It does not. Interest is charged on what you still owe, so at the beginning, when you owe nearly everything, almost the entire payment is interest and only a sliver touches the balance. The proportions invert slowly, and only near the end does the payment become mostly principal.

The practical consequence is that equity builds slowly at first and quickly later. That single fact explains why moving after three years can leave you with far less than expected, why overpaying early is so much more powerful than overpaying late, and why two loans with the same payment can leave you in very different positions after a decade.

Use this page when you need the shape of the loan rather than a single number: to see what you will owe in a particular year, to check how much equity you will have built by the time you plan to move, to decide whether a shorter term is worth the higher payment, or simply to see, in plain figures, what a long loan really costs.

How to read the schedule

Each row shows the payment number, the interest portion, the principal portion, and the balance remaining. The payment total stays identical the whole way down on a fixed-rate loan, which is exactly what makes the changing split so visible.

Two columns deserve most of your attention. The balance tells you what you would still owe if you sold or refinanced at that point. The cumulative interest tells you what the loan has cost you so far, which is the figure that makes the case for a shorter term or extra payments better than any argument.

If you add a recurring or annual extra amount, the schedule shortens. Rows disappear from the end, because overpayments remove the final payments, the ones that would have been almost pure principal. That is why a modest, consistent extra has such a disproportionate effect on total interest.

Where to go next

If you only need the payment itself, the mortgage calculator is the faster route, and it covers escrow costs and payment frequency too. To find out how large a loan your income supports before you model one, start at the affordability calculator.

To push on overpayments, the extra payment calculator and the mortgage payoff calculator isolate exactly what a given extra buys you, and the biweekly mortgage calculator compares the fortnightly schedule against the monthly one.

If the balance in a given year is what you are really after, pair this with the loan to value calculator to see where you stand against the property value, or the home equity calculator to see what you have built. Considering a change of loan? The refinance calculator and break-even calculator use the remaining balance this page gives you as their starting point, and a lump sum can be modelled in the recast calculator.

How the schedule is built

The payment itself comes from the standard amortization formula, and then the schedule is built one period at a time by repeating three small steps.

interest = B × r   |   principal = M − interest   |   B_next = B − principal

B

the balance outstanding at the start of the period

r

the periodic rate: the annual rate divided by payments per year

M

the scheduled payment, which stays constant on a fixed-rate loan

Why the split moves on its own

Nothing in the loan actively rebalances the payment. The split changes purely because the balance changes. Interest is recalculated each period against a slightly smaller balance, so the interest portion falls a little, and since the total payment is fixed, the principal portion must rise by exactly the same amount.

That tiny shift compounds. Each extra unit of principal repaid makes the next period’s interest smaller, which frees more for principal again. The schedule accelerates towards the end for the same reason it crawls at the beginning.

Where extra payments land

An extra amount is applied to the balance after the scheduled payment for that period. From the next period onward, interest is charged on the reduced balance, so the saving is not just the extra itself but every unit of interest that extra would have generated for the remaining life of the loan.

This is why timing matters more than size. The same amount paid in year two removes far more interest than in year twenty, because it has longer to stop interest accruing. It is also why the schedule ends early rather than the payment getting smaller: the payment is fixed, so the loan simply runs out of rows.

Interest-only is a different animal

If a payment covers only the interest due, the principal portion is zero and the balance never moves. There is no amortization at all, which is why an interest-only period leaves you owing exactly what you started with, and why the payment jumps sharply once repayment of the balance begins. This page models a repayment schedule; the interest-only mortgage calculator models both phases.

Rounding, and why the last payment is odd

The calculation keeps full precision internally and rounds only for display, which is why a schedule occasionally shows a final payment slightly different from all the others. The balance has to land exactly on zero, and the last row absorbs whatever rounding remains. A lender’s statement does the same thing.

What the schedule cannot show you

A schedule is arithmetic on the loan alone. It does not know about property tax, insurance, or service charges collected alongside it, so the row totals will be smaller than the amount your lender actually collects. Add those in the mortgage calculator when you want the true monthly outgoing.

It also assumes the rate holds for the entire term. On a variable loan every reset rebuilds the schedule from that point, so treat a projection beyond the fixed period as an illustration rather than a forecast.

What this page assumes

This calculator uses the standard fixed-rate repayment schedule, keeps full precision internally, and rounds currency only for display and export.

Each period applies interest, scheduled principal, then any allowed extra principal.

Worked examples, step by step

Take a 350,000 loan at 6.5% over thirty years. The payment is 2,212.24 every month, all 360 of them. The first month’s interest is 350,000 × (0.065 ÷ 12) = 1,895.83, which leaves just 316.40 to reduce the balance. After a full year of payments totalling 26,546.88, the balance has fallen by only 3,912.04. Just under 15% of that first year went to the loan itself.

Where the loan actually stands, year by year

Read down the middle column and the shape of the loan appears. After five years of payments, over 110,000 has gone to interest and barely 22,000 to the balance. After ten years, a third of the term, you still owe 296,716 of the original 350,000.

The balance does not fall to half the original amount until month 257, which is year 21.4 of a 30-year loan. More than two thirds of the term passes before you are halfway through the debt. Nothing has gone wrong; this is simply what amortization looks like from the inside.

The first year against the last

In year one, 3,912.04 of the payments reduces the balance and 22,634.82 goes to interest. In year thirty, the same twelve payments put 25,635.34 against the balance. Identical payments, six and a half times the effect, purely because of what is owed at the time.

This is the whole argument for overpaying early rather than later, and the reason a short ownership period builds so little equity from payments. If you expect to move within a few years, most of your equity will come from the deposit and any change in the property’s value, not from the loan being repaid.

The vocabulary, on and around this page

Amortization

The gradual repayment of a loan through scheduled payments that cover interest first and reduce the balance with what is left. The split shifts toward principal as the loan matures.

Amortization schedule

The full table of a loan, one row per payment, showing the interest portion, the principal portion, and the balance remaining afterwards.

Principal portion

The part of a payment that actually reduces what you owe. It is small at the start of a loan and grows every period.

Interest portion

The part of a payment that pays the lender’s charge for the period. It is calculated on the balance outstanding, so it shrinks as the balance does.

Outstanding balance

What you still owe at a given point. This is the figure that matters for selling, refinancing, or working out equity.

Cumulative interest

The running total of interest paid up to a given payment. It is usually the most persuasive column in the whole schedule.

Periodic rate

The interest rate applied in a single period, found by dividing the annual rate by the number of payments in a year.

Scheduled payment

The fixed amount due each period, calculated so the balance reaches exactly zero on the final payment of the term.

Extra principal

Any amount paid above the scheduled payment and applied straight to the balance, which shortens the schedule from the end.

Equity

The share of the property you own outright: its value less what you still owe. It grows through repayment and through any rise in value.

Front-loaded interest

The pattern by which early payments are mostly interest, because interest is charged on the largest balance at the start of the loan.

Interest-only period

A phase in which payments cover interest alone, so the balance does not fall. No amortization happens during it.

Negative amortization

What happens when a payment does not cover the interest due and the shortfall is added to the balance, so the debt grows despite payments being made.

Recast

Re-amortizing a loan after a lump sum so the payment is recalculated over the remaining term, keeping the same rate and end date.

Term

The total length of the loan, usually expressed in months here. It sets how many rows the schedule has.

Fixed rate

A rate that does not change for the life of the loan, which is what allows a full schedule to be projected reliably from the start.

Balloon payment

A large amount due at the end of some loans because the schedule was not designed to reach zero through regular payments alone.

Payoff amount

What a lender requires to close the loan on a given date. It is the balance plus interest accrued since the last payment, so it differs slightly from a schedule row.

Escrow

Property tax and insurance collected alongside the loan payment. It is not part of amortization, so it never appears in the schedule.

Loan to value

The balance expressed as a percentage of the property value. Falling balances and rising values both improve it.

Common mistakes, and what this page will not do

• Expecting the balance to fall evenly. It falls slowly then quickly. On a thirty year loan the balance does not halve until around year 21, which surprises almost everyone the first time they see it.
• Reading a schedule row as your monthly bill. The rows cover principal and interest only. Property tax, insurance, and service charges are collected on top, so your lender will ask for more.
• Assuming early equity comes from payments. In the first few years almost all equity comes from your deposit and any change in property value. Repayment contributes very little.
• Overpaying late and expecting the same result. The same amount saves far more in year two than year twenty, because it has longer to stop interest accruing. Timing matters more than size.
• Confusing the balance with a payoff figure. A lender adds interest accrued since the last payment, and sometimes fees. The payoff quote is always a little higher than the schedule row.
• Projecting a variable rate to the end of the term. Every rate reset rebuilds the schedule from that point. Beyond a fixed period, treat the projection as an illustration rather than a forecast.
• Mixing months and years in the term field. The length is entered in months here. Typing 30 instead of 360 produces a schedule for a very short, very expensive loan.
• Not designating overpayments as principal. Unless an extra amount is marked for principal, some lenders hold it toward the next payment instead, and the schedule never shortens.
• Forgetting that a longer term multiplies interest. Stretching the term lowers each payment but adds rows, and every row carries interest. The cumulative column shows the true price of that trade.

What this calculator leaves out: This calculator does not include property tax, insurance, or association charges in the schedule, predict rate changes on a variable loan, model mortgage insurance, apply fees or prepayment penalties, produce an official payoff quote, or reflect a specific lender’s accounting conventions. It models a fixed-rate repayment schedule from the figures you enter.

Frequently asked questions