Amortization calculator
An amortization calculator helps you understand how fixed mortgage payments work. It shows how much of each payment reduces your loan balance and how much goes to interest. The calculator can also show how you can save by making extra payments.
Create an amortization schedule
Enter the loan amount and term at the start of the mortgage. All fields are required.
See how paying extra toward your loan balance reduces the amount of interest you'll pay.
Understanding amortization
How to use the amortization calculator
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How to use the amortization calculator
This calculator breaks down every payment and shows how extra cash unlocks faster payoffs and big interest savings.
Here's how it works:
- Enter your loan amount: Down payment - home price
- Add your interest rate: This is factored by things like your credit, loan term, and today’s market
- Pick your loan term: Most choose 30 or 15 years
- Set your loan start date: This determines when when your loan will be paid off.
- Enter any extra payments: See how much you’ll save and how much faster you can own it all
Understanding the amortization calculator results
Your results will breakdown:
- Your monthly payment
- Total interest you’ll pay
- Loan pay off date
- Total cost of your mortgage
Glance at your personalized schedule to watch each payment shrink your principal and interest month after month.
Thinking about paying extra? Instantly see how prepayments accelerate your pay off date and cut your interest costs. Small moves, big progress.
Mortgage loan amortization formula
If you love the details, here’s how the mortgage formula actually works:
M = P x [R(1 + R^T] / [(1 + R)^T - 1]
Breakdown of the variables:
- M: Monthly payment
- P: Principal amount. Your loan balance you need to pay off.
- R: Monthly interest rate. Annual rate divided by 12.
- T: Term (in months). This is your total number of payments. For example, a 30-year mortgage has 360 payments.
Keep in mind this formula doesn’t account for property taxes and homeowners insurance, which will add to your monthly payment.
Amortization for mortgages vs. other loans
Amortization isn’t just for mortgages. Fixed-payment loans that reduce principal include:
- Auto loans
- Personal loans
- Student loans
- Home equity loans
Non-amortizing loans keep your balance steady and your cash flexible, but you’ll likely pay more interest. Examples:
- Credit cards
- HELOCs
- Balloon loans
- Interest-only loans
Common amortization mistakes that homeowners make
Amortization makes budgeting easier, but watch out for these pitfalls:
- Longer terms = more interest.
- Calculators may skip taxes and insurance.
- ARMs can raise payments when rates change.
When to consider making extra payments
Extra payments toward your mortgage principal can help you:
- Save on interest
- Build equity faster
- Pay off your home sooner
Extra payments are powerful, but once that money hits your loan, it’s not easy to pull back. Make sure you’ve got enough for life’s what-ifs.
Frequently asked questions
You can also get help from a Home Loan Expert.
What’s an amortization schedule?
Every payment builds equity. Early payments go mostly toward interest, but over time, more pays down your principal. Your amortization schedule shows exactly how your loan balance shrinks month by month.
Why should I use an amortization schedule calculator?
Our amortization calculator helps you:
- Estimate your monthly mortgage payment
- Track how principal payments grow over time
- See how much interest you’ll pay monthly and overall
- Understand how quickly you’ll build home equity
How many years will come off my mortgage by paying extra?
How much and how often you make extra payments can make a big difference. Even one extra payment a year could shorten a 30-year mortgage by about 5 years and save you thousands in interest.
Use our amortization calculator to see how extra payments can change your payoff schedule.
What’s prepaying your mortgage?
Making extra payments toward your principal is called prepaying your mortgage. It helps you:
- Reduce total interest paid
- Pay off your loan faster
- Build equity sooner
Some lenders charge prepayment penalties, but Rocket Mortgage® doesn’t.
