Finance

Amortization Calculator

See exactly how each loan payment splits between principal and interest over the life of the loan.

Formula:
M = P × [r(1+r)^n] / [(1+r)^n − 1]
Interest = Balance × Monthly Rate
Principal = Payment − Interest

What is Amortization?

Amortization is the process of spreading a loan into a series of fixed payments. Each payment covers interest on the remaining balance plus a portion of the principal. Early payments are mostly interest; later payments are mostly principal.

The Power of Extra Payments

Adding even $100/month extra toward principal on a $250,000 mortgage at 6.5% saves over $60,000 in interest and pays off the loan nearly 5 years early.