# Amortization Calculator

> Amortization calculator: build a full mortgage or loan amortization schedule and see how extra payments cut interest. Free, editable rates, no signup.

- **Canonical URL:** https://boringtoolskit.com/amortization-calculator/
- **Category:** Everyday Calculators
- **Evidence level:** authored-methodology
- **Reviewed:** August 2026
- **Last verified:** 2026-10-12
- **Privacy:** Inputs and results stay in this browser unless the page clearly labels an external request.

## How it works

Payment = amount x r/12 / (1 - (1 + r/12)^-n); extra payments cut term length and total interest proportionally.

## Worked example

A $200,000 loan at 6.5% for 30 years: $1,264.14 a month in principal and interest; the 15-year comparison at 5.75% is computed alongside.

## Assumptions

- The loan uses a fixed annual interest rate and standard monthly compounding.
- Payments are made monthly on schedule, with interest calculated on the remaining balance.
- Fees, taxes, insurance, and prepayment penalties are excluded.
- Extra payments are applied to principal in the month they are made.

## Common questions

### What is an amortization calculator?

An amortization calculator estimates the monthly payment on a fixed-rate loan and shows a full schedule of how each payment is split between interest and principal, plus the declining balance. It can also show the effect of extra monthly payments.

### How is the monthly payment calculated?

The payment uses the standard formula P × r ÷ (1 − (1 + r)^−n), where P is principal, r is the monthly interest rate, and n is the number of monthly payments. For example, a $200,000 loan at 6.5% for 30 years has a payment of about $1,264.

### Does paying extra each month really save that much?

Yes. Because interest is charged on the remaining balance, extra principal payments reduce future interest. A $200 monthly extra on the example loan pays it off about 9 years early and saves roughly $90,000 in interest.

### What is the difference between interest and principal in a payment?

The interest portion is the cost of borrowing for that month, calculated on the current balance; the principal portion is what actually reduces what you owe. Early in a loan, most of the payment is interest; near the end, most is principal.

### Should I make extra payments or invest the money?

It depends on the guaranteed return you get. Paying down a 6.5% loan is a risk-free 6.5% return; investing might earn more but carries risk. Many people choose extra principal payments for the certainty, after confirming their lender allows them without penalty.

## Related tools

- /mortgage-payment-calculator/
- /loan-comparison-calculator/
- /emi-calculator/

## Sources

- [What is a mortgage?](https://www.consumerfinance.gov/ask-cfpb/what-is-a-mortgage-en-104/)
- [Consumer Loans](https://www.federalreserve.gov/consumerscommunities/consumer_loans.htm)

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