Amortization Calculator
Calculate monthly loan payments and the total interest paid over the life of a loan. Shows how each payment splits between principal and interest using the standard amortization formula.
Must be greater than 0
Minimum: 0
Minimum: 0.5
Results
Monthly Payment
$1,580.17
Total Amount Paid
$568,861.22
Total Interest Paid
$318,861.22
How to Use This Calculator
Enter your input values
Fill in all required input fields for the Amortization Calculator. Follow the units and input format printed next to each field. Where a unit selector is available, choose the units that match your data.
Review your inputs
Double-check that all values are correct and match the units or format shown for each field. Incorrect units are the most common source of calculation errors and can produce results that are off by factors of 2, 10, or more.
Read the results
The Amortization Calculator computes the output in your browser and displays the results, with units clearly labeled, as soon as they are ready — no data sent to a server.
Explore parameter sensitivity
Try adjusting individual input values to see how the output changes. This is a quick and effective way to develop intuition about how different parameters influence the result and to identify which inputs have the largest effect.
When to Use This Calculator
- •Use the Amortization Calculator when comparing financial options side-by-side — such as different loan terms or investment returns — to make more informed decisions.
- •Use it to quickly estimate costs or returns before making purchasing, investment, or borrowing decisions.
- •Use it for financial education and planning to understand how compound interest, fees, or tax affects the real value of money over time.
- •Use it when building or reviewing a budget to verify that projections and calculations are mathematically correct.
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About Amortization Calculator
The amortization calculator computes the fixed monthly payment for a fully amortizing loan, along with the total interest paid over its lifetime. Amortization is the process of paying off debt through regular equal payments that cover both interest and principal. In the early years, most of each payment goes to interest; over time, the principal portion increases as the loan balance shrinks. This calculator is essential for anyone taking out a mortgage, car loan, or personal loan. Understanding amortization helps you see the true cost of borrowing, evaluate different loan terms, and decide whether extra payments or refinancing make financial sense.
The Math Behind It
Formula Reference
Amortization Payment
PMT = P * r(1+r)^n / ((1+r)^n - 1)
Variables: P = principal; r = monthly rate; n = total number of payments
Worked Examples
Example 1: 30-year mortgage
$250,000 mortgage at 6.5% annual rate for 30 years.
Monthly payment is $1,580 with $318,861 in total interest over 30 years.
Example 2: Car loan
$25,000 car loan at 5% for 5 years.
Monthly payment is $472 with $3,307 total interest.
Common Mistakes & Tips
- !Forgetting to divide the annual rate by 12 to get the monthly rate.
- !Not accounting for property taxes, insurance, and PMI, which increase the actual monthly housing cost beyond the loan payment.
- !Comparing only monthly payments between loan options without considering total interest paid.
Related Concepts
Used in These Calculators
Calculators that build on or apply the concepts from this page:
Frequently Asked Questions
How much can I save by making extra payments?
Even small extra payments can save thousands. An extra $100/month on a $250,000 30-year mortgage at 6.5% saves about $58,900 in interest and pays off the loan almost 5 years (56 months) early.
Is a 15-year or 30-year mortgage better?
A 15-year mortgage has higher monthly payments but dramatically lower total interest (often less than half). A 30-year mortgage offers lower payments and more flexibility.
What is negative amortization?
When payments are too small to cover the interest, the unpaid interest is added to the principal, increasing the loan balance. This can occur with certain adjustable-rate or payment-option mortgages.
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