Mortgage Amortization Calculator
Calculate your mortgage amortization schedule and see exactly how each payment is split between principal and interest. Understand how amortization works and track your equity building over time.
Loan Summary
Current Period Analysis
Loan Progress
Amortization Schedule
Enter loan details and click "Calculate" to view amortization schedule
Understanding Mortgage Amortization
Amortization is the process by which loan payments are divided between interest and principal. Understanding amortization helps you see how your mortgage payments build equity over time and how extra payments can accelerate this process.
How Amortization Works
Each mortgage payment consists of two parts: interest and principal. Early in the loan, most of your payment goes toward interest. Over time, as your loan balance decreases, more of each payment goes toward principal.
The Amortization Schedule
An amortization schedule shows exactly how each payment is allocated. It includes:
- Payment Number: The sequence of payments
- Payment Amount: Total payment (principal + interest)
- Principal Portion: Amount that reduces the loan balance
- Interest Portion: Cost of borrowing for that period
- Remaining Balance: Loan balance after the payment
Key Insights from Amortization
Early Payments
- 90%+ goes to interest
- Slow equity building
- High interest costs
- Small principal reduction
Later Payments
- 50/50 principal/interest split
- Rapid equity building
- Lower interest costs
- Fast principal reduction
Using Amortization to Your Advantage
- Extra Payments: Apply extra payments to principal to reduce interest
- Bi-Weekly Payments: Make payments every two weeks to accelerate payoff
- Refinancing: Lower rates change the principal/interest allocation
- Loan Comparison: Compare different loan terms and rates
- Equity Tracking: Monitor how your equity grows over time
Amortization vs. Simple Interest
Unlike simple interest loans where interest is calculated on the original principal, amortized loans recalculate interest on the remaining balance each month. This means the interest portion decreases over time while the principal portion increases.
Tip: Review your amortization schedule regularly to understand your loan's progress. Making extra principal payments early in the loan term can save you thousands in interest and help you build equity faster.