Amortization Calculator
Generate a complete amortization schedule for any loan. See exactly how each payment is split between principal and interest, analyse the impact of extra payments (monthly, annual, or one-time), and view a yearly summary to plan your payoff strategy.
Understanding Amortization
What is Amortization?
Amortization is the process of paying off a debt over time through regular, equal payments. Each payment covers that month’s interest charge, with the remainder reducing the principal. In early payments, most goes to interest; by the end, almost all goes to principal. This structure is defined by the PMT formula.
The Amortization Formula
Payment = P × [r(1+r)^n] / [(1+r)^n − 1]
For each month k:
Interest_k = Balance_(k−1) × r
Principal_k = Payment − Interest_k
Balance_k = Balance_(k−1) − Principal_k
Worked Example — $200,000 Mortgage at 6.75% for 30 Years
- Monthly rate r = 6.75% ÷ 12 = 0.5625%
- n = 30 × 12 = 360 payments
- Payment = 200,000 × [0.005625 × 1.005625^360] / [1.005625^360 − 1] = $1,297.20/month
- Month 1: Interest = $200,000 × 0.005625 = $1,125; Principal = $1,297.20 − $1,125 = $172.20
- Month 180: Interest ≈ $870; Principal ≈ $427 (you are finally paying more principal than interest)
- Total interest over 30 years = $266,992
2025 US Mortgage Rates by Loan Type & Term
| Loan Program | 30-Year Rate | 15-Year Rate | Notes |
|---|---|---|---|
| Conventional (Fannie/Freddie) | 6.75–7.25% | 6.00–6.50% | 20% down, 740+ FICO |
| FHA Loan | 6.50–7.00% | 5.80–6.30% | 3.5% down, lower credit OK |
| VA Loan | 6.25–6.75% | 5.75–6.25% | 0% down, veterans only |
| USDA Loan | 6.40–6.90% | — | Rural areas, 0% down |
| Jumbo Loan | 6.90–7.40% | 6.20–6.70% | >$766,550 loan amount |
| 5/1 ARM | 6.00–6.50% | — | Adjusts after 5 years |
| 10/1 ARM | 6.40–6.90% | — | Adjusts after 10 years |
Rates as of January 2025 — vary by lender, credit score, LTV, and location.
Effect of Extra Payments — $300,000 at 7% for 30 Years ($1,996/month)
| Extra/Month | Payoff | Total Interest | Interest Saved | Years Saved |
|---|---|---|---|---|
| $0 | 360 months | $418,527 | — | 0 |
| $100 | 330 months | $373,741 | $44,786 | 2.5 |
| $200 | 307 months | $79,455 | 4.4 | |
| $500 | 264 months | $276,684 | $141,843 | 8.0 |
| $1,000 | 220 months | $211,044 | $207,483 | 11.7 |
References
- Consumer Financial Protection Bureau (CFPB) — What is an amortization schedule?
- Freddie Mac — Primary Mortgage Market Survey (PMMS) weekly rate data.
- Federal Housing Finance Agency (FHFA) — Conforming loan limits 2025.
- HUD (Department of Housing and Urban Development) — FHA loan guidelines.
- US Department of Veterans Affairs — VA home loan program details.
