Reviewed by:David Chen, CFA
Chartered Financial Analyst with 15 years of experience in real estate and mortgage financing.
Use this amortization calculator to see a full breakdown of your loan payments. Enter your loan amount, interest rate, and term to generate a complete amortization schedule showing how much of each payment goes to principal vs. interest.
Amortization Calculator
Monthly
Yearly
Amortization Formulas
This calculator first finds the monthly payment (M) and then loops through each payment, calculating the interest and principal components.
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Interest = Balance * i
Principal = M – Interest
Amortization is an accounting and finance term that refers to the process of paying off a debt (like a loan or mortgage) over time through regular, equal payments. Each payment is divided into two parts: one part to cover the interest owed for that period, and the remaining part to pay down the principal loan balance.
In the beginning of a loan, a larger portion of your payment goes toward interest. As the loan balance decreases, the interest portion of the payment also decreases, allowing a larger portion to go toward the principal. An amortization schedule is a table that details this breakdown for every payment over the entire life of the loan, showing the running balance of principal remaining after each payment.
How to Calculate Amortization (Example)
Let’s calculate the first two payments for a $100,000 loan at 6% (0.5% per month) for 30 years (360 payments). The calculated monthly payment (M) is $599.55.
This process repeats, with the interest portion slowly decreasing and the principal portion slowly increasing, until the balance reaches $0 on the 360th payment.
Frequently Asked Questions (FAQ)
Why do I pay so much interest at the beginning?
Interest is calculated based on the outstanding balance. In the early years, your balance is highest, so the interest charge is also at its highest. As you pay down the principal, the balance drops, and the interest charged on that smaller balance decreases with each payment.
What is a “yearly” amortization schedule?
A yearly schedule summarizes the 12 monthly payments for each year into a single row. It shows the total principal and interest paid for that year and the remaining balance at the end of the year. This is less overwhelming than a full 360-row table for a 30-year loan.
How can I pay off my loan faster?
The best way to pay off your loan faster is to make extra payments toward the principal. This is not shown in a standard amortization schedule, but you can use an “Extra Payment” or “Overpayment” calculator to see the effect. Even small extra amounts can significantly reduce the total interest paid.
document.addEventListener(‘DOMContentLoaded’, function() {
// Get Elements
const loanAmountInput = document.getElementById(‘amort-loan-amount’);
const interestRateInput = document.getElementById(‘amort-interest-rate’);
const loanTermInput = document.getElementById(‘amort-loan-term’);
const scheduleTypeSelect = document.getElementById(‘amort-schedule-type’);
const calculateBtn = document.getElementById(‘amort-calculate-btn’);
const resetBtn = document.getElementById(‘amort-reset-btn’);
const resultsDiv = document.getElementById(‘amort-calculation-steps’);
// Attach Event Listeners
calculateBtn.addEventListener(‘click’, calculateAmortization);
resetBtn.addEventListener(‘click’, resetCalculator);
/**
* Helper function to calculate monthly mortgage payment (P&I).
*/
function calculateMonthlyPayment(principal, annualRate, termYears) {
if (principal <= 0 || termYears <= 0) return 0;
const monthlyRate = (annualRate / 100) / 12;
const numberOfPayments = termYears * 12;
if (monthlyRate === 0) {
return principal / numberOfPayments;
}
const payment = principal * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) /
(Math.pow(1 + monthlyRate, numberOfPayments) – 1);
return payment;
}
function calculateAmortization() {
// Get and parse values
const principal = parseFloat(loanAmountInput.value);
const annualRate = parseFloat(interestRateInput.value);
const termYears = parseFloat(loanTermInput.value);
const scheduleType = scheduleTypeSelect.value;
// — Validation —
if (isNaN(principal) || isNaN(annualRate) || isNaN(termYears)) {
showError('Please fill in all fields with valid numbers.');
return;
}
if (principal <= 0 || termYears <= 0 || annualRate < 0) {
showError('Loan amount and term must be positive. Interest rate cannot be negative.');
return;
}
// — Calculation —
const monthlyPayment = calculateMonthlyPayment(principal, annualRate, termYears);
if (monthlyPayment <= 0) {
showError('Could not calculate monthly payment. Check your inputs.');
return;
}
const monthlyRate = (annualRate / 100) / 12;
const numberOfPayments = termYears * 12;
let remainingBalance = principal;
let totalInterest = 0;
let schedule = []; // To store each period's data
let yearlyPrincipal = 0;
let yearlyInterest = 0;
for (let i = 1; i <= numberOfPayments; i++) {
const interestPaid = remainingBalance * monthlyRate;
const principalPaid = monthlyPayment – interestPaid;
remainingBalance = remainingBalance – principalPaid;
// Fix for potential floating point issues on the last payment
if (i === numberOfPayments) {
remainingBalance = 0;
}
totalInterest += interestPaid;
yearlyPrincipal += principalPaid;
yearlyInterest += interestPaid;
if (scheduleType === 'monthly') {
schedule.push({
period: i,
principal: principalPaid,
interest: interestPaid,
balance: remainingBalance
});
}
if (scheduleType === 'yearly' && (i % 12 === 0 || i === numberOfPayments)) {
schedule.push({
period: "Year " + (i / 12),
principal: yearlyPrincipal,
interest: yearlyInterest,
balance: remainingBalance
});
// Reset yearly counters
yearlyPrincipal = 0;
yearlyInterest = 0;
}
}
// — Display Results —
showResults(monthlyPayment, principal, totalInterest, schedule);
}
function showResults(monthlyPayment, principal, totalInterest, schedule) {
resultsDiv.style.display = 'block';
resultsDiv.classList.remove('amort-error');
const totalPayment = principal + totalInterest;
const periodHeader = scheduleTypeSelect.value === 'monthly' ? 'Month' : 'Year';
// 1. Generate Summary
let summaryHtml = `
Loan Summary
Monthly Payment${formatCurrency(monthlyPayment)}
Total Principal${formatCurrency(principal)}
Total Interest${formatCurrency(totalInterest)}
Total Payments${formatCurrency(totalPayment)}
`;
// 2. Generate Table
let tableHtml = `
Amortization Schedule
${periodHeader}
Principal Paid
Interest Paid
Remaining Balance
`;
for (const row of schedule) {
tableHtml += `
${row.period}
${formatCurrency(row.principal)}
${formatCurrency(row.interest)}
${formatCurrency(row.balance)}
`;
}
tableHtml += `
`;
resultsDiv.innerHTML = summaryHtml + tableHtml;
// Scroll to results on mobile
if (window.innerWidth < 768) {
resultsDiv.scrollIntoView({ behavior: 'smooth' });
}
}
function showError(message) {
resultsDiv.style.display = 'block';
resultsDiv.innerHTML = `
