Mortgage amortization calculator

What mortgage amortization means

Amortization is the gradual repayment of a loan through scheduled payments. Each payment covers interest for the period and pays down some of the principal, the amount still owed. This calculator shows that split for a fixed-rate mortgage paid monthly.

The loan amount is the money borrowed, not the property’s purchase price. Enter the loan’s stated interest rate rather than APR: APR includes certain borrowing costs that this repayment model does not include. All example inputs are illustrations, not current offers or forecasts.

How to read your schedule

Start with the monthly principal-and-interest payment, then compare total interest with the amount borrowed. Total paid is principal plus interest across all scheduled payments. It excludes taxes, insurance and other ownership costs.

Choose a loan year to inspect its monthly rows. Payment numbers count from the first installment, not from a calendar date. Principal reduces the balance; interest pays the borrowing charge. Remaining balance is what is left immediately after that payment. The final row reaches zero, and the final payment can differ from the regular payment because of cent rounding.

At a positive rate, interest is higher early in the loan because the unpaid balance is larger. As principal falls, less interest accrues and more of the payment can reduce the balance. This does not mean interest always exceeds principal early on: the split depends on the rate and term. At zero interest, all payments go toward principal.

Payment formula and methodology

For a positive interest rate, the level monthly payment before cent rounding is:

M = P × r / (1 − (1 + r)^(−n))

• P is the original loan amount in US dollars.
• r is the annual percentage rate of interest divided by 1,200 (for example, 6 ÷ 1,200 = 0.005). Use the note rate, not the disclosure labeled APR.
• n is the term in years multiplied by 12.
• M is the regular monthly principal-and-interest payment.

At zero interest, M = P / n. This follows from the present value of all scheduled payments equaling the amount borrowed. We calculate the payment with full numeric precision, then round to the nearest cent, with a minimum payable amount of one cent.

For each month, interest equals the previous balance multiplied by the monthly rate, rounded to cents with half cents rounded up. Principal equals the payment minus that rounded interest. The next balance is the previous balance minus principal. We keep balances and totals in whole cents. Each payment is capped at the amount owed; the last scheduled payment clears any remaining balance plus that month’s interest. Tiny loans can finish before the entered term. At extreme rates or long terms, cumulative rounding can make the final adjustment larger.

Supported inputs are $0.01–$100 million in whole cents, annual rates from 0–25% with at most six decimal places, and whole-year terms from 1–50. These calculation bounds are not statements about loan availability. Monthly interest rounding is our explicit modeling convention; lenders may carry fractional cents or use different timing, changing the schedule and total interest.

Worked example: $320,000 at 6% for 30 years

The monthly rate is 0.005 and the term is 360 payments. The regular monthly payment rounds to $1,918.56. In the first month, interest is $320,000 × 0.005 = $1,600.00. Principal is $1,918.56 − $1,600.00 = $318.56, leaving a balance of $319,681.44.

Using the monthly cent-rounding convention above, total principal is $320,000.00, total interest is $370,683.35, and total paid is $690,683.35. The final payment is $1,920.31, including $9.55 of interest, and leaves zero balance. Multiplying $1,918.56 by 360 would miss the final adjustment. These totals describe this specific schedule, not a lender quote.

For a zero-interest comparison, $1,000 over one year has eleven payments of $83.33 and a final payment of $83.37. Total interest is zero and principal repayments sum to exactly $1,000.

Limitations and using the estimate

This schedule assumes a fixed rate, timely monthly payments at the end of each period and no fees added to principal. It does not model daily accrual, irregular first periods, missed payments, refinancing, adjustable rates, interest-only periods, extra payments or balloon terms. It is not a payoff statement: a lender’s payoff amount can include interest through a specific date and fees.

To estimate taxes, insurance, HOA and PMI alongside the loan payment, use the related mortgage payment calculator. A repayment schedule alone does not tell you whether a loan fits your income, savings or other obligations. Confirm payment terms and any discrepancies with your lender.

Frequently asked questions

For informational estimates only. This tool is not a loan quote, payoff statement, approval or individualized financial, tax or legal advice. Confirm the schedule and terms with your lender.