Compare against an alternative loan
Optional: enter an alternative loan term and rate to see how the monthly payment, total interest, and payoff time compare to the loan above.
Calculation details
Planning estimate only, not financial, tax, or legal advice. Verify assumptions and current rules before making decisions.
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Use this result
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What does this calculator estimate?
An amortization calculator shows the monthly payment for a loan and a full schedule of principal and interest over time. Enter the loan amount, rate, and term to see the payment and schedule.
- Payment = P × r ÷ (1 − (1+r)^−n)
- Interest = balance × monthly rate each period
- Total interest can exceed the principal on long loans
How amortization works
An amortizing loan is repaid in equal payments, each split between interest on the remaining balance and principal reduction. Early payments are interest-heavy; as the balance falls, more of each payment goes to principal.
Limitations to watch for
The schedule assumes a fixed rate and on-time payments for the full term. Variable-rate loans, extra payments, and refinancing change the schedule. Property taxes, insurance, and fees are separate from the principal-and-interest payment.
How to use it in practice
Use the schedule to see how extra payments shorten the term and cut interest. Compare 15- vs 30-year terms by total cost, not just the monthly payment. Check how much equity you build at any point in the schedule.
['Enter the loan amount, annual rate, and term.', 'The tool computes the payment and the amortization schedule.', 'Review total interest and the balance-over-time pattern.']
How this calculator works
Formula
Monthly payment = P × r ÷ (1 − (1 + r)^−n), where P = principal, r = monthly rate (annual ÷ 12), n = number of months. Each payment: interest = balance × r; principal = payment − interest; balance decreases until zero.
Worked example
A $250,000 mortgage at 6% for 30 years (360 months): payment = $250,000 × 0.005 ÷ (1 − 1.005^−360) ≈ $1,499/month. Total interest over the life ≈ $289,600.
Assumptions to verify
- A fixed annual interest rate applied monthly.
- Equal payments made at the end of each month.
- No extra payments, fees, or rate changes.
Frequently asked questions
What is an amortization schedule?
A table showing each monthly payment's split between interest and principal and the remaining balance, from the first payment to payoff.
How is the monthly payment calculated?
Payment = P × r ÷ (1 − (1+r)^−n). For $250,000 at 6% over 30 years, that's about $1,499/month.
Why is most of the early payment interest?
Interest accrues on the full balance at the start. As principal shrinks, the interest share falls and the principal share grows.
How much interest will I pay total?
Multiply the payment by the term and subtract the principal. On a 30-year $250,000 mortgage at 6%, total interest is roughly $290,000 — nearly the loan itself.
How do extra payments help?
Extra principal payments reduce the balance directly, shortening the term and cutting future interest — often saving tens of thousands on a mortgage.
Is a 15-year loan better than 30?
The 15-year has a higher payment but dramatically lower total interest. Choose based on cash flow: the 30-year's flexibility can be offset by making extra payments when possible.
Does this include taxes and insurance?
No — the schedule covers principal and interest only. Escrowed taxes and insurance are added to the actual payment.
Cite this tool
BoringToolsKit. “Amortization Calculator.” boringtoolskit.com/amortization-calculator/ (reviewed 2026-08-25). Free to reference in articles, syllabi, and answer posts with a link.
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