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Monthly payments · Total interest · Full amortization schedule
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Amortization Schedule
| # | Payment | Principal | Interest | Balance |
|---|
How this loan calculator works out your monthly payment
Every fixed-rate loan uses the same formula, whether it is a mortgage, a car loan, or a personal loan:
M = P × [ r(1 + r)n ] ÷ [ (1 + r)n − 1 ]
Where P is the amount borrowed, r is the monthly interest rate (the annual rate divided by 12), and n is the total number of payments. A 6.5% annual rate is 0.5417% per month; a 30-year term is 360 payments.
The formula produces a payment that stays identical every month, but the split between interest and principal inside that payment changes with every single payment. That split is where most of the money actually goes, and it is what this loan calculator makes visible.
Why your early payments barely touch the balance
Interest is charged on what you still owe. At the start you owe almost everything, so almost all of the payment is interest. This is the single most surprising thing about a mortgage, and it is worth seeing in actual numbers.
Take $350,000 borrowed at 6.5% over 30 years. The monthly principal-and-interest payment is $2,212.24. Here is where that payment goes over the life of the loan:
| Payment | Interest | Principal | Balance left |
|---|---|---|---|
| Month 1 | $1,895.83 (86%) | $316.40 | $349,683.60 |
| Month 12 (1 year) | $1,876.46 (85%) | $335.78 | $346,087.96 |
| Month 60 (5 years) | $1,777.07 (80%) | $435.17 | $327,638.42 |
| Month 120 (10 years) | $1,610.47 (73%) | $601.76 | $296,716.44 |
| Month 233 (19.4 years) | $1,104.25 (50%) | $1,107.98 | $202,754.26 |
| Month 300 (25 years) | $621.05 (28%) | $1,591.19 | $113,064.57 |
| Month 360 (final) | $11.92 (0.5%) | $2,200.32 | $0.00 |
Month 233 is the moment worth knowing about. That is the first payment where more goes to principal than to interest — 19 years and 5 months into a 30-year loan. For nearly two thirds of the term, the bank is getting more of your payment than your equity is.
The total cost is larger than most people expect
Set the same figures in the loan calculator above and the 30-year totals come out as:
- Total interest paid: $446,405.71
- Total repaid: $796,405.71
You pay more in interest than you borrowed in the first place. At 6.5% over 30 years the interest comes to roughly 128% of the principal. This is not a quirk of these particular numbers — it is what a long term at a mid-single-digit rate does, and it is the reason the term matters as much as the rate.
What an extra $200 a month actually does
Because interest is charged on the outstanding balance, anything extra you pay comes straight off the principal and stops accruing interest for the remaining life of the loan. The effect compounds.
On the same $350,000 at 6.5%, adding $200 per month from the first payment:
- Loan clears in 286 months instead of 360 — 6 years 2 months early
- Total interest falls to $338,308.88
- $108,096.83 saved
That is roughly $108,000 returned for $200 a month, which is the strongest argument for overpaying that exists. Two caveats worth knowing: confirm your lender applies extra payments to principal rather than holding them as a prepaid instalment, and check whether your loan carries a prepayment penalty — uncommon on US mortgages now, but not extinct on other loan types.
15-year versus 30-year in the loan calculator
Same loan, same rate, shorter term:
- 30-year: $2,212.24 per month, $446,405.71 total interest
- 15-year: $3,048.88 per month, $198,797.64 total interest
The payment rises by $836.64 — about 38% — while the interest bill drops by $247,608.07, roughly 56%. In practice 15-year loans also tend to carry a slightly lower rate than 30-year loans, which widens the gap further.
The trade-off is flexibility, not arithmetic. A 30-year loan with voluntary overpayments gets you most of the saving while leaving you able to drop back to the lower required payment in a bad month. A 15-year loan locks in the discipline and the higher obligation.
What this loan calculator does not include
The figure produced here is principal and interest only. A real mortgage payment usually bundles several other things into one monthly bill:
- Property tax, often collected monthly into escrow and easily hundreds of dollars.
- Homeowners insurance, usually escrowed alongside it.
- PMI — private mortgage insurance, typically required below 20% equity, and typically removable once you cross that threshold. Many people keep paying it long after they could have asked for it to be dropped.
- HOA or condo fees, which are not part of the loan at all but land in the same monthly budget.
- Closing costs and points, paid up front, which change the effective cost of the loan without changing the payment.
Add those and a $2,212 principal-and-interest payment routinely becomes $2,900 or more in real monthly outgoings. If a lender's quoted payment is much higher than the number here, escrow is usually the reason — not an error.
The calculation also assumes a fixed rate for the whole term. Adjustable-rate loans, interest-only periods, balloon payments and negative amortisation all behave differently and are not modelled.
Data and method
Every figure on this page is produced by the standard amortisation formula shown above, calculated to the cent and verified against a full 360-month schedule that terminates at a zero balance. The worked example uses $350,000 at 6.5% over 30 years; change any input in the calculator and the schedule recalculates.
The calculation runs entirely in your browser. Nothing you enter is transmitted or stored.
This is an estimate for planning and for checking a lender's figure that looks wrong. It is not financial advice, and actual terms depend on your credit profile and the lender's underwriting. See the disclaimer for the limits of these tools.
Think a number here is wrong? Send the inputs you used and it gets checked.