How this calculator works
Amortization is the process of paying off a loan through fixed periodic payments, where each payment covers that period's interest first and puts the remainder toward the principal balance. This calculator shows exactly how that split changes over time: a detailed month-by-month breakdown for the first year, followed by one summarized row per year for the rest of the term.
Because interest each month is charged on the current outstanding balance, early payments are interest-heavy and later payments are principal-heavy, even though the payment amount itself never changes on a fixed-rate loan. Scanning down the balance column shows how slowly the principal drops at first and how quickly it accelerates near the end of the term.
The formula
Fixed payment: M = P × i ÷ (1 − (1 + i)^−n)Each period: interest = balance × i; principal paid = M − interest; new balance = balance − principal paidP is the loan amount, i the monthly interest rate (annual rate ÷ 12), and n the total number of monthly payments (years × 12). Repeating the per-period step for every month produces the full schedule; summing any block of rows gives that block's principal and interest totals.
Worked example: $200,000 at 6% for 30 years
- Monthly rate i = 0.06 ÷ 12 = 0.005; number of payments n = 360; payment M = 200,000 × 0.005 ÷ (1 − 1.005^−360) ≈ $1,199.10.
- Month 1: interest = 200,000 × 0.005 = $1,000.00; principal paid = 1,199.10 − 1,000.00 = $199.10; balance falls to $199,800.90.
- Month 2: interest is now charged on the lower balance, 199,800.90 × 0.005 = $999.00, so slightly more of the payment, $200.10, reduces principal.
- By year 30 the balance reaches zero; total interest paid over the full schedule is about $231,676, more than the original loan amount.
Frequently asked questions
Why does the schedule show months for year one but years after that?
A full month-by-month table for a 30-year loan would run to 360 rows, which is more detail than most people need after the first year. Showing every month for year one, then a yearly total for the rest, keeps the early detail where the balance moves fastest while still summarizing the full loan life.
Why is so little of my early payment going to principal?
Interest is calculated on the outstanding balance, which is at its highest right at the start of the loan. As the balance slowly falls, less of each fixed payment is needed to cover interest, so a growing share goes to principal — an effect that compounds over the life of the loan.
Does the schedule change if I make extra payments?
Yes, extra payments shrink the balance faster than the schedule shown here, which reduces every future month's interest and shortens the loan. This calculator shows the standard schedule with no extra payments; see the extra payment calculator to model that scenario.
Do the principal and interest columns always add up to the payment?
Yes, for every monthly row, principal paid plus interest charged equals the fixed monthly payment exactly. For the yearly summary rows, the same holds for the yearly totals of principal and interest against the year's total payments.
Is this the same as a mortgage amortization schedule?
Yes — a mortgage is simply an amortizing loan secured by real estate, and the underlying math is identical to any other fixed-rate installment loan, whether for a home, a car, or a personal loan.