Amortization
calculator
Amortization is how a loan is paid off in equal instalments. Enter the amount, rate and term to see the monthly payment, the total interest and the balance over time.
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How amortization works
Each equal payment covers the interest due that month plus a slice of the balance. Early on most of it is interest; as the balance falls, more goes to principal, so the loan clears faster near the end. The payment itself stays the same throughout.
The cost of time
A longer term lowers the monthly payment but raises the total interest sharply, because you borrow the money for longer. Shortening the term or overpaying cuts the interest a lot. The five-year balance shows how slowly principal falls at the start. For the payment alone, see the loan payment tool.
Amortization FAQ
Paying off a loan in equal instalments that each cover interest plus part of the balance, until it reaches zero.
Interest is charged on the outstanding balance, which is largest at the start, so early payments are mostly interest.
Choose a shorter term or make overpayments; both cut the time the balance is outstanding and reduce total interest.
No. It is principal and interest only. Property tax, insurance and fees are separate.