Generate a full amortization schedule with monthly or yearly view. Compare up to 3 loans. See exactly how extra payments reduce interest and accelerate your payoff date.
Enter up to 3 loans to compare monthly payments, total interest, and total cost. Useful for evaluating different terms, rates, or loan types side by side.
See exactly what different extra payment strategies do to your payoff timeline and total interest. Enter your loan details, then choose a target payoff goal or compare preset acceleration scenarios.
When you take out an installment loan — a mortgage, auto loan, personal loan, or student loan — each monthly payment you make is split into two components: a portion that pays down the principal (the amount you borrowed) and a portion that pays interest (the cost of borrowing). This split is not fixed throughout the life of the loan. It changes every single month according to a mathematical process called amortization.
In the early months of a fully amortized loan, the interest component dominates. On a $300,000 30-year mortgage at 7%, the first payment of $1,996 is split approximately $1,750 to interest and only $246 to principal. By the final payment, the split has flipped completely: nearly the entire payment goes to principal with just a few dollars to interest. The amortization schedule is the complete table documenting every one of these splits across every payment of the loan's term.
Monthly payment is calculated using the standard loan payment formula: M = P × [r(1+r)^n] / [(1+r)^n − 1] where M is the monthly payment, P is the principal balance, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments (years × 12). This formula ensures that equal payments made every month will exactly retire the debt at the end of term n, with no balance remaining and no underpayment — the defining characteristic of a fully amortized loan. The math is elegant: as the principal shrinks each month, less interest accrues, which means more of the fixed payment goes toward principal, which shrinks it faster, which reduces interest further, and so on until the balance reaches zero.
The front-loading effect has profound implications for borrowers who are considering extra payments or refinancing. Because interest is charged as a percentage of the outstanding balance, and the balance is highest at the beginning of the loan, the early years are when the bank earns the most from you. On a 30-year $300,000 mortgage at 7%, you pay approximately $104,000 in interest in just the first 10 years — about 44% of your total interest bill — while only reducing your balance by about $44,000. This is why refinancing early in a loan term (while the balance is still high) captures more savings than refinancing late. It's also why extra principal payments made early in a loan term are worth significantly more than the same dollars paid later.
This calculator handles fixed-rate loans, where the interest rate remains constant for the life of the loan and monthly payments never change. Adjustable-rate mortgages (ARMs) follow the same amortization math during their fixed initial period, but when the rate adjusts, the remaining balance is re-amortized over the remaining term at the new rate — producing a new, higher or lower monthly payment. The 5/1, 7/1, and 10/1 ARM structures mean the rate is fixed for 5, 7, or 10 years respectively, then adjusts annually subject to periodic and lifetime caps. For ARM planning, model the initial period with this calculator, then re-run with the worst-case adjusted rate to understand payment risk.
Negative amortization occurs when a borrower's payment is less than the interest accruing on the loan, causing the balance to increase rather than decrease. This was a feature of certain "option ARM" mortgage products that allowed minimum payments below the interest-only threshold. In standard fixed-rate loans with required full payments, negative amortization does not occur. It can occur in income-driven student loan repayment when monthly payments are insufficient to cover accruing interest — though the SAVE plan now has an interest subsidy that prevents this for federal borrowers. Understanding negative amortization is important when evaluating low-payment loan products, as the balance growth compounds and can leave borrowers owing more than they borrowed.
| Loan Type | Typical Term | Typical Rate (2025) | Notes |
|---|---|---|---|
| 30yr Fixed Mortgage | 30 years | 6.5–7.5% | Most interest paid; lowest monthly cost |
| 15yr Fixed Mortgage | 15 years | 6.0–7.0% | Roughly double monthly pmt; ~half total interest |
| Auto Loan (new) | 48–72 months | 6.0–9.0% | Front-loading less severe due to short term |
| Auto Loan (used) | 36–60 months | 8.0–13.0% | Higher rates significantly impact total cost |
| Personal Loan | 24–84 months | 8.0–20.0% | No collateral; rates vary widely by credit |
| Federal Student Loan | 10–25 years | 5.5–9.1% | Multiple plans; forgiveness options available |
| HELOC | 10yr draw + 20yr repay | Prime + margin | Variable rate; interest-only draw period common |
Extra principal payments are one of the most powerful and underutilized tools available to borrowers. Because they reduce the principal balance immediately, they permanently reduce the interest accruing on that balance for every future payment — a compounding benefit that grows larger the earlier the extra payment is made.
Consider a $300,000 30-year mortgage at 7%. The standard monthly payment is $1,996 and total interest paid over 30 years is approximately $418,500. Adding $200/month in extra principal payments reduces total interest to roughly $311,000 — a savings of over $107,000 — and cuts the payoff timeline from 30 years to about 23 years and 4 months. That $200/month extra payment, totaling about $56,000 contributed over those 23 years, returns over $107,000 in interest savings: nearly a 2-to-1 return on the extra dollars deployed. No investment account offers a guaranteed 2-to-1 return — this is the effective yield of paying down a 7% debt early.
Both strategies reduce interest, but with different optimal use cases. Monthly extra payments provide consistent principal reduction and compound over time — they're easy to automate and produce predictable outcomes. Lump-sum extra payments (tax refunds, bonuses, inheritances) can have an outsized effect when applied early in the loan because they immediately reduce the base against which all future interest is calculated. A $10,000 lump sum applied at month 12 of a 30-year 7% mortgage saves approximately $45,000 in interest over the life of the loan. The same $10,000 applied at year 20 saves only about $12,000 — demonstrating the time-value of early principal reduction.
Reading your amortization schedule isn't just a math exercise — it's a financial planning tool. The year-by-year view makes it easy to identify meaningful milestones: the crossover point where principal paid exceeds interest paid in a given year, the month your balance drops below a round-number threshold, or the year when total interest paid finally stops growing faster than total principal paid. For mortgage borrowers, the schedule also reveals when you'll cross the 80% LTV threshold required to cancel private mortgage insurance (PMI) — potentially saving hundreds of dollars per month without refinancing.
The Loan Comparison tab solves one of the most common financial dilemmas: 15-year versus 30-year mortgage. A $300,000 loan at 7% on a 30-year term costs $418,500 in total interest. The same loan on a 15-year term at 6.5% costs roughly $165,000 in total interest — a difference of over $253,000. The tradeoff is a monthly payment that jumps from about $1,996 to about $2,613. Whether that $617/month difference is better deployed as forced mortgage paydown or left flexible for investing, emergency reserves, or other goals is a household-specific decision — but the comparison table makes the exact numbers unmistakable, so the decision is made with full information rather than approximation.