Mortgage amortization calculator

How a fixed-rate mortgage balance changes

The same payment every month can feel like it barely moves the balance at first — and for a fixed-rate loan, that feeling is arithmetically accurate. Amortization is the schedule that explains why, and this calculator lays that schedule out year by year.

Who should use this calculator

Use it to see how much of your payment builds equity versus how much simply covers interest, especially early in a loan, or to compare how a shorter term or lower rate changes total lifetime interest. It is loan mathematics only — pair it with True Monthly Home Cost for the full housing payment.

What each input means

• Loan amount — the amount financed, after any down payment.
• Annual interest rate — the fixed rate applied for the full term.
• Loan term — the number of years the loan is scheduled to run.

How the calculation works

Amortization divides a fixed-rate loan into equal scheduled principal-and-interest payments. Early payments contain more interest because interest is calculated on a larger outstanding balance. As principal falls, the interest portion decreases and more of the same payment reduces principal. The calculator uses the standard payment formula with the loan amount, monthly interest rate, and number of monthly payments, then produces annual checkpoints for remaining balance, cumulative principal, and cumulative interest.

A worked example, using the figures already loaded above

A $400,000 loan at 6.5% for 30 years has a scheduled principal-and-interest payment of about $2,528 a month for the full term. After year 1, only about $4,471 of the roughly $30,339 paid that year has gone to principal — the rest is interest. By year 10, cumulative principal paid reaches about $60,895. Over all 30 years, total interest paid comes to about $510,178 — more than the original loan amount — on top of the $400,000 borrowed.

How to interpret the result

The early years of any fixed-rate loan are interest-heavy by design, not because something is wrong with the loan — it is a direct consequence of interest being calculated on whatever balance remains. A shorter term or extra principal payments shrink total interest by shortening how long a large balance accrues interest at all; comparing two term lengths or rates side by side on this calculator shows that trade-off in dollars rather than in the abstract.

What the schedule does not include

• Property taxes, insurance, HOA dues, PMI, lender fees, and servicing charges.
• Adjustable rates, missed payments, recasting, refinancing, or loan modifications.
• Extra payments unless you separately model a new balance or term.

Why the result is an estimate

This is scheduled-payment mathematics on a fixed rate and term you entered. Any real-world change — a rate reset, a missed payment, refinancing, or an extra payment — moves the actual balance away from this schedule immediately.

Common mistakes to avoid

• Assuming a fixed monthly payment means a fixed amount of equity gained each month — it does not, especially in the early years.
• Comparing total interest across two loans without also comparing the term length driving that total.
• Forgetting that a lower monthly payment from a longer term usually means more total interest, not less.

Related guides and calculators

• True Monthly Home Cost calculator — see this payment alongside taxes, insurance, HOA, and maintenance.
• PMI Timeline Estimator — uses this same amortization schedule to estimate when a loan-to-value threshold is reached.
• Down Payment Comparison Calculator — see how a different loan amount changes this schedule.
• Why a mortgage payment isn't the true cost — how this principal-and-interest schedule fits into the fuller monthly picture.