Amortization Calculator
Calculate monthly loan payments and total interest for any amortizing loan. See exactly how much interest you will pay over the life of a mortgage or loan.
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Monthly Payment
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Total Interest Paid —
Total Amount Paid —
Interest to Loan Ratio —
How to Use This Calculator
- Enter the Loan Amount — the principal you are borrowing.
- Enter the Annual Interest Rate — your loan's APR.
- Enter the Loan Term in years.
- See your fixed Monthly Payment, Total Interest Paid, and Total Amount Paid.
Formula
Monthly Payment:
M = P × [r(1+r)^n] / [(1+r)^n − 1]
Total Interest: (M × n) − P
- P = Loan principal
- r = Monthly rate (Annual rate ÷ 12)
- n = Total payments (Years × 12)
Example
Example: $300,000 loan, 6.5% rate, 30-year term.
- Monthly Payment: $1,896.20
- Total Paid: $682,632
- Total Interest: $382,632
- Interest-to-Loan Ratio: 127.5% — you pay 2.27× the original loan
Frequently Asked Questions
- Amortization is the process of paying off a loan with regular fixed payments over time. Each payment covers interest accrued plus a portion of the principal. Early payments are mostly interest; later payments shift toward principal.
- Because interest is calculated on the remaining balance, early payments have a high balance to charge against. A $300,000 mortgage at 6.5% accrues about $1,625 in interest in month one, but only a few hundred dollars in the final months.
- Extra principal payments reduce your balance faster, which reduces future interest charges. On a 30-year mortgage, paying one extra payment per year can shave 4–5 years off the loan and save tens of thousands in interest.
- Both spread costs over time, but amortization applies to loans and intangible assets (paying off a loan balance), while depreciation applies to physical assets (reducing the book value of equipment or property over time).
- Yes — a full amortization schedule shows each payment broken into principal and interest portions, plus the remaining balance. Many lenders provide this; your mortgage servicer is required to provide one on request.