Amortization Schedule Calculator

An amortization schedule is the loan's X-ray: it shows, period by period, how much of each payment is interest, how much is principal, and what balance remains. This calculator builds the full year-by-year schedule so you can see the interest-heavy early years with your own eyes.

What is an amortization schedule?

Amortization is the process of paying off a loan in equal installments over time, and an amortization schedule is the complete map of that process. For every payment, the schedule records how much goes to interest, how much goes to principal, and the balance that remains afterward. Although the payment itself is constant on a fixed-rate loan, its composition is anything but: the schedule starts out interest-heavy and ends almost entirely principal.

The pattern comes from one simple fact: each month's interest is calculated on the current balance. At the start of a $200,000 loan at 5.5%, the first month's interest alone is about $917 — more than half of a $1,634 payment. Fifteen years later the final month's interest is under $8. Nothing about the loan changed; the balance simply fell, so the interest charged on it fell with it, freeing more of each payment to attack the principal. This is sometimes described as the loan 'gathering speed' — the balance curve in the chart bends downward more steeply every year.

Schedules matter practically, not just intellectually. They tell a borrower exactly how much equity a few years of payments actually build (often disappointingly little early on), what a refinancing would reset, and how extra payments would rewrite every future row. Any lender can generate your schedule on request, and federal disclosure rules require the payment stream to be spelled out; this calculator lets you generate one yourself for any scenario in seconds.

How an amortization schedule is calculated

The calculator computes the fixed monthly payment from the amortization formula, then simulates the loan month by month: each month, interest accrues on the balance at the monthly rate, the payment is applied first to that interest and then to principal, and the balance falls by the remainder. The monthly rows are then grouped into years, summing the payments, principal, and interest for each 12-month block — the yearly summary shown in the table above the article and used in the worked example.

A yearly summary is the right level of detail for most planning: it keeps the table readable (15 rows instead of 180) while preserving every total exactly. If you need a specific month — for example, the balance on a planned sale date — note its year's ending balance; the balance at any point in the year lies between that figure and the prior year's.

Check the totals row against the loan calculator: the sum of all interest in the schedule must equal the loan's total interest, and the sum of all principal must equal exactly the amount borrowed. That identity is a good audit of any schedule a lender hands you — if the principal column does not add up to the loan amount, something else (fees, insurance, a balloon) is hiding in the payments.

The schedule also exposes the cost of restarting a loan. Refinancing a mortgage after seven years into a new 30-year term resets the schedule to its interest-heavy beginning; even at a lower rate, the borrower can pay more lifetime interest. Compare remaining-schedule interest, not just the new payment, before refinancing.

Worked example

A $200,000 loan at 5.5% fixed for 15 years. The calculator above is pre-loaded with these numbers, and its yearly table matches the schedule below row for row.

Look at Year 1: of $19,610.00 paid, only about $8,830.40 reduced the balance — roughly $10,779.61 went to interest. Now look at Year 15: the same payments are almost entirely principal. Total interest over the schedule is $94,150.04 on a $200,000 loan — the price of spreading repayment over 15 years at 5.5%.

The midway point is instructive too. After 7 years — nearly half the term — the balance is still about $126,686.26, well over half the original amount. Borrowers are often surprised how slowly equity builds in the first half of a loan; the schedule shows why, and it shows exactly how much an extra monthly payment would change every subsequent row (try it in the loan payoff calculator).

How extra payments rewrite the schedule

An extra payment goes entirely to principal (make sure the lender applies it that way), so it does not just skip one row — it shrinks every interest figure after it, because each subsequent month's interest is computed on a smaller balance. An extra $100 a month on the example loan saves roughly $9,000 of interest and ends the loan 15 months early. An extra $200 saves roughly $16,300. The savings grow faster than the extra payments because of this cascade through the schedule.

Lump sums work the same way and are even more potent early: $5,000 paid against principal in Year 1 of the example loan saves about $6,300 in interest over the remaining schedule — more than the $5,000 itself, because that slice of balance would have kept generating interest for years. The earlier the prepayment, the more rows it rewrites.

One structural alternative is a biweekly schedule — half the monthly payment every two weeks — which quietly makes 26 half-payments, i.e., 13 full payments a year instead of 12. It is simply a painless way of adding one extra payment annually, and the schedule effect is identical to paying that amount extra each year.

Reading a schedule when buying or refinancing

Before buying, use the schedule to answer the equity question: if you might sell in five years, what will you still owe? Read the Year 5 balance — that, against a realistic sale price, is your equity before costs. If the balance barely moved, most of your early payments were rent paid to the lender, which changes the rent-vs-buy comparison for short stays.

Before refinancing, compare the interest remaining on your current schedule with the total interest on the new loan's schedule plus closing costs. A lower payment on a restarted 30-year schedule frequently hides a higher lifetime cost. The honest comparison is schedule against schedule, totals against totals.

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