Amortization Calculator
Calculate your Loan amortization schedule in seconds with the free Amortization Calculator. No registration needed.
Loan
Summary
What is an Amortization Calculator?
An Amortization Calculator generates a complete loan payment schedule showing each payment divided into principal and interest. Enter your loan amount, interest rate, and term to see exactly how your loan is paid down month by month.
How to calculate amortisation manually (the formula)
The monthly payment is calculated with: M = P [ r(1+r)n ] / [ (1+r)n – 1 ] where M is the monthly payment, P is the principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments (term in years × 12). For each payment, the interest portion is the current balance × r, and the principal portion is M minus the interest.
Example calculation
For a $200,000 loan at 6.5% over 30 years: the monthly payment is about $1,264. In the first month, $1,083 goes to interest and only $181 to principal. After 15 years, roughly equal amounts go to principal and interest. After 30 years, the total interest paid is about $255,000.
Common mistakes
- Confusing amortisation with simple interest — Amortised loans recalculate interest on the remaining balance each month. Simple interest is calculated only on the original principal.
- Not realising how much interest you pay early on — In the first few years, the vast majority of each payment goes to interest, not principal.
- Ignoring the benefits of extra payments — Adding even $50 per month to principal can save thousands in interest and shave years off the loan.
- Choosing the longest term without comparing — A 30-year term has much lower payments than 15 years but roughly double the total interest.
- Not understanding how rate changes affect the schedule — A small rate increase significantly raises total interest and can extend how long it takes to build equity.
Frequently asked questions
What is an amortisation schedule?
An amortisation schedule is a table that shows each loan payment broken down into principal and interest. It shows the remaining balance after each payment so you can see how your loan is paid down over time.
How does an amortisation calculator work?
An amortisation calculator takes your loan amount, interest rate, and term, then generates a full payment schedule. Each row shows the payment number, principal paid, interest paid, and remaining balance.
Why do I pay more interest at the start of the loan?
Interest is calculated on the outstanding balance. Early in the loan the balance is largest, so the interest portion is highest. As you pay down the principal, the interest portion decreases and the principal portion increases.
Can extra payments reduce my amortisation schedule?
Yes. Making extra payments toward the principal reduces the balance faster, which saves on interest and shortens the loan term. Even small additional payments can make a difference.
Is this calculator free to use?
Yes, completely free with no sign-up or download required. You can use it as many times as you like.