Loan Amortization Calculator
See how your loan payment breaks down between principal and interest over time.
Results
Loan amortization shows how each payment splits between principal reduction and interest charges. In the early years most of your payment goes to interest, but the balance shifts over time as the principal decreases. This calculator breaks down the first year so you can see exactly where your money goes.
Explore all our loan and mortgage calculator tools, or browse the full finance calculators.
Frequently asked questions
Amortization is the process of spreading a loan into a series of fixed payments over time. Each payment covers interest on the remaining balance plus a portion of principal, with the principal share increasing as the balance decreases.
Interest is calculated on the outstanding balance. At the start of a 30-year loan the balance is at its highest, so the interest portion is largest. As you pay down principal, less interest accrues and more of each payment goes to principal.
On a typical 30-year mortgage at 6%, about 75-80% of your first year's payments go to interest. By year 15 it is roughly 50/50, and in the final years almost all goes to principal.
Extra payments go directly to principal, which reduces the balance faster. This means every future payment has a smaller interest portion, saving you money and shortening the loan term.
Standard fixed-rate loans use this amortization schedule. Adjustable-rate mortgages (ARMs) recalculate when the rate changes. Interest-only loans do not amortize during the interest-only period.