Amortization calculator

An amortization schedule is a table that shows you how much of a mortgage payment is applied to the loan balance, and how much to interest, for every payment until the loan is paid off. 

An amortized loan has a payment made up of principal – the amount you borrowed, or your loan balance – and the interest you pay for borrowing the money. Amortization calculates when those amounts change and by how much. 

Because your loan balance is largest at the beginning of your mortgage, more of your payment goes to interest. That changes over time as your loan balance shrinks, until you’re paying more principal than interest.

It’s easiest to create an amortization schedule using a calculator because it does the math for you. Here’s the information you’ll need to enter. 

A starting loan amount. If you already have a mortgage, be sure to use the loan amount from when your mortgage started. If you’re buying a home and have a down payment, subtract that from the loan amount. 

An interest rate. Use your current interest rate if you already have a mortgage. If you’re buying a home, you can estimate using today’s rates. 

The starting loan length (term). The most common mortgage term is 30 years because it has the lowest monthly payments. But you can try shorter terms too, like 15 years. 

The loan’s start date. It’s okay to estimate here if you don’t know exactly. But your results won’t be as precise. 

Select Calculate, and you’ll get an amortization schedule where you can see how much of each payment reduces the loan balance, and how much goes to interest. 

You could create one yourself using spreadsheet software, or if you’re handy with math, calculate it month by month using an amortization formula. But the easiest way to get an amortization schedule is to use an amortization calculator.

You can use an amortization schedule calculator to learn several different things related to fixed-rate mortgages. Here are just a few:

• See how much of each mortgage payment goes to reducing your loan balance, and how much interest you pay.
• View the monthly payment for a loan amount – remembering that it doesn’t include taxes and insurance.
• See the total interest you’ll pay on your mortgage if you make every payment and don’t pay extra.
• See the total cost of a mortgage, which is the loan amount plus the total interest.
• Using calculate extra payments, you can see how much you can save on interest by paying extra toward your loan balance – the principal.
• Determine when you’ve paid enough toward your loan balance to have equity in your home. That’s generally the difference between what you owe and what your home is worth, although home values affect this too.

It depends on the amount of your extra payments, as well as the frequency. But even just one extra payment a year can make a huge difference. On a 30-year mortgage, one extra payment per year can take 5 years off the loan! 

Play around with our amortization calculator and see how different extra payment amounts affect paying off your loan and the interest you can save.

Making extra payments that go toward your loan balance – the principal – is also called prepaying. If you can do it, it’s a smart move for the following reasons:

• It reduces the amount of interest you pay
• You can pay your mortgage off sooner
• You build equity faster (equity is generally the difference between your loan balance and what your home is worth)

If you’re paying on a loan with Rocket Mortgage, you won’t be charged fees for paying your mortgage off sooner.