Amortization Calculator — USA

Generate a complete monthly payment schedule showing exactly how much goes to principal and interest each month.

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Annual Interest Rate (APR)

Loan Term

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Summary

Enter loan details to generate amortization schedule

Amortization Calculator — See Exactly Where Every Dollar Goes

An amortization schedule is the complete payment-by-payment breakdown of your loan — showing exactly how much of each monthly payment goes to interest versus principal, and your remaining balance after each payment. For US borrowers with a 30-year mortgage, this schedule reveals a striking truth: in the first years, the vast majority of your payment is pure interest. Understanding this helps you make smarter decisions about extra payments, refinancing, and when to buy vs rent.

On a $350,000 mortgage at 7% over 30 years, your monthly payment is $2,329. In month 1: $2,042 goes to interest, only $287 to principal. By year 10, the split improves but interest still dominates. Only in year 22 does principal finally exceed interest in each payment. This is why extra payments made early in a mortgage save so much more than those made later.

What is Loan Amortization?

Amortization is the process of paying off a loan through scheduled, equal periodic payments over time. Each payment covers the interest accrued since the last payment, with the remainder reducing the principal balance. As the balance decreases, less interest accrues, so more of each subsequent payment goes to principal — creating an accelerating paydown effect.

US mortgages are almost universally fully amortizing — meaning every scheduled payment is calculated so the loan reaches exactly $0 at the end of the term. This is different from balloon loans (common in some commercial real estate) where a large lump sum is due at the end.
The amortization schedule is a legally required disclosure for US mortgages under the Truth in Lending Act (TILA). Your lender must provide this at closing. It shows every payment for the life of the loan.
Extra principal payments permanently alter the amortization schedule — reducing the outstanding balance means less interest accrues in subsequent months, effectively shortening the loan term. Use our Mortgage Payoff Calculator to model the exact impact of extra payments.
Adjustable-rate mortgages (ARMs) have amortization schedules that must be recalculated at each rate adjustment. A 5/1 ARM has a fixed schedule for years 1–5, then a new schedule is calculated based on the new rate at each annual adjustment.

How to Use This Calculator

Enter the Loan Amount (e.g., $350,000 for a mortgage or $25,000 for a personal loan).
Enter the Annual Interest Rate — your loan's APR (e.g., 7%).
Set the Loan Term — 30 years for most US mortgages; 3–7 years for personal loans.
Optionally enter a Start Date to see exact payment dates and your payoff date.
Click Calculate — view the complete month-by-month schedule and annual summaries.
Use the schedule to identify the optimal time for extra payments or refinancing.

Amortization Formula

Monthly Payment = P × r × (1 + r)ⁿ / [(1 + r)ⁿ − 1]

Monthly Interest = Remaining Balance × (APR ÷ 12 ÷ 100)
Principal Paid = Monthly Payment − Monthly Interest
New Balance = Previous Balance − Principal Paid
Example: $350,000 at 7%, 30 years — Monthly Payment = $2,329
Month 1: Interest = $2,042 | Principal = $287 | Balance = $349,713
Month 120 (Year 10): Interest = $1,889 | Principal = $440 | Balance = $323,000
Month 360 (Final): Interest = $14 | Principal = $2,315 | Balance = $0

Key Terms

Fully Amortizing Loan: A loan where each scheduled payment covers all accrued interest plus some principal, resulting in a $0 balance at the end of the term. All standard US mortgages and personal loans are fully amortizing. The alternative — interest-only loans — were common before 2008 and contributed to the financial crisis by building no equity.
Principal: The original loan amount, or the remaining balance still owed. Early in amortization, very little of each payment reduces principal. On a 30-year $350,000 mortgage at 7%, only about $3,300 in principal is paid in the first year — despite making $27,948 in payments. The rest ($24,648) is interest.
Equity: The portion of your home's value you own outright — market value minus remaining mortgage balance. Equity builds through two mechanisms: principal paydown (from your mortgage payments) and appreciation (rising home values). After 10 years on a $350,000 mortgage at 7%, you've paid down only ~$27,000 in principal through scheduled payments.
Negative Amortization: When your payment is less than the interest accrued — causing your balance to increase rather than decrease. Standard Qualified Mortgages (QM) under Dodd-Frank cannot negatively amortize. This was a major cause of underwater mortgages during the 2008 financial crisis.
Refinancing Break-Even: The point where interest savings from a refinanced lower rate exceed the closing costs paid. Calculated as: closing costs ÷ monthly savings. If refinancing costs $6,000 and saves $200/month, break-even is 30 months. If you plan to stay longer than 30 months, refinancing makes financial sense.

Tips for US Borrowers

Extra payments are most powerful early — an extra $200/month in year 1 of a 30-year mortgage saves far more than $200/month in year 20, because it eliminates interest on a larger outstanding balance.
Use the schedule to time refinancing — refinancing resets your amortization, meaning you start paying mostly interest again on the new loan. Compare total interest paid, not just monthly payment.
Biweekly payments add one extra payment per year — paying half your monthly payment every two weeks results in 26 half-payments (13 full payments) per year. On a 30-year mortgage, this typically saves 4–6 years and tens of thousands in interest.
Download your amortization schedule for taxes — the interest paid column shows your deductible mortgage interest each year. Cross-reference with your Form 1098 from your lender for tax filing.
ARM rate adjustments reset your schedule — when an ARM adjusts, the remaining balance is re-amortized over the remaining term at the new rate. Request a new schedule from your servicer after each rate adjustment.

Frequently Asked Questions

This is fundamental to how amortization works. Interest is calculated on the outstanding balance each month. Early in the loan, the balance is at its highest — so the interest charge is also highest. On a $350,000 mortgage at 7%, month 1 interest = $350,000 × (7% ÷ 12) = $2,042. After 10 years of payments, the balance is approximately $323,000, so month 121 interest = $1,888. The fixed monthly payment means more goes to principal as the balance falls — but this shift is slow in the early years of a 30-year loan.

Extra payments applied to principal permanently reduce your outstanding balance, which reduces interest in all future months and shortens your loan term. On a $350,000 mortgage at 7%, an extra $300/month reduces the 30-year term by approximately 7 years and saves about $130,000 in total interest. Always confirm with your servicer that extra payments are applied to principal, not future payments.

It depends on current rates vs your rate, how long you'll stay, and closing costs. Refinancing makes sense when current rates are at least 0.75%–1% below your rate and you'll stay long enough to recoup closing costs (typically $3,000–$6,000). Extra payments make sense when rates aren't significantly lower than yours, or when you have limited time remaining and a refinance would restart your amortization.

The amortization schedule helps you understand your interest payments, but for actual tax filing, use Form 1098 (Mortgage Interest Statement) sent by your lender each January. This form reports the exact interest paid during the tax year for IRS purposes. If you itemize deductions, mortgage interest on up to $750,000 of debt (for loans after December 15, 2017) is deductible.

The difference is enormous in total interest paid. On a $350,000 mortgage at 7%: 30-year = $2,329/month, total interest = $488,000. 15-year = $3,145/month, total interest = $216,000 — saving $272,000 in interest. The 15-year costs $816 more per month but saves over a quarter million dollars and builds equity twice as fast. 15-year rates are also typically 0.5%–0.75% lower than 30-year rates, widening the savings further.

An Adjustable-Rate Mortgage (ARM) has a fixed amortization schedule for the initial period (e.g., 5 years for a 5/1 ARM), then the rate adjusts annually based on an index (typically SOFR) plus a margin. At each adjustment, the remaining balance is re-amortized over the remaining term at the new rate. If rates rise, your payment increases; if they fall, it decreases. ARMs typically start with lower rates — suitable if you plan to sell or refinance before the first adjustment.

The math is identical — both use the same amortization formula. The differences are practical: personal loan terms are much shorter (2–7 years vs 15–30 years for mortgages), so the interest-to-principal ratio shifts much faster. On a 3-year personal loan, you're paying meaningful principal from month 1. Mortgage amortization is dominated by interest for the first decade. Personal loans also have no collateral (typically), higher rates (7%–36% vs 6%–8% for mortgages), and no tax deduction for interest.