Amortization Calculator
See how each mortgage payment splits between principal and interest, and how much interest you pay over the life of the loan.
By Onias Derilus, Mortgage Capital · NMLS# 1859012 · Last Updated: June 2026
Early payments are mostly interest; the principal share grows every month. Estimate only — excludes taxes, insurance, and any extra payments.
Amortization is the schedule that pays your loan down to zero over its term. Every payment is the same dollar amount, but the split between interest and principal shifts over time.
In the early years most of your payment covers interest. As the balance falls, more of each payment chips away at principal — which is why extra payments made early save the most.
How to Use This Calculator
- 1
Enter your loan amount — the financed balance, not the home price.
- 2
Set an illustrative interest rate and your loan term.
- 3
Review the monthly payment and how the first year splits between principal and interest.
- 4
Check the total interest figure to understand the true long-term cost of the loan.
The Formula & Assumptions
Each month:
interest = balance × monthly rate
principal = payment − interest
balance = balance − principal
Repeat until balance reaches zero.
The fixed monthly payment is computed from the standard amortizing-loan formula, then each month the interest portion is calculated on the remaining balance and the rest reduces principal.
Because interest is charged on a shrinking balance, the principal portion grows a little every month while the interest portion falls. This is why a 30-year loan front-loads interest so heavily.
Adding extra principal early in the schedule removes future interest on that amount for the remaining term, which is the single most powerful way to cut total cost.
Frequently Asked Questions
Why is so much of my early payment interest?
Interest is charged on the outstanding balance, which is largest at the start. As you pay the balance down, the interest charge shrinks and more of each fixed payment goes to principal.
How can I pay less interest over the life of the loan?
Choose a shorter term, secure a lower rate, or make extra principal payments — especially in the early years. A 15-year term, for example, dramatically cuts total interest versus a 30-year term.
Does the amortization schedule include taxes and insurance?
No. Amortization covers only principal and interest. Taxes, insurance, and any mortgage insurance are separate escrow items added to your monthly payment.
What happens to amortization if I refinance?
Refinancing starts a new amortization schedule. If you reset to a fresh 30-year term, you return to the interest-heavy early years, so compare total interest, not just the monthly payment.
Ready to Turn Your Estimate Into a Real Pre-Approval?
Get a personalized rate quote and pre-approval from a licensed Florida mortgage broker — no obligation.
Rates are illustrative only. APR and payments vary by credit score, loan amount, and market conditions. Subject to credit approval. Not a commitment to lend. NMLS# 1859012. Equal Housing Lender.