Money & finance
Loan amortisation calculator
Estimate a fixed monthly principal-and-interest payment, see how the balance changes, and test how recurring or one-time extra payments affect payoff time.
Works locally in your browser
How this tool works
An amortising loan is gradually repaid through payments split between principal and interest. This calculator creates a month-by-month estimate so you can inspect that split instead of relying on one payment number.
Calculations run locally in your browser. Add optional financed fees and extra principal payments, then compare the estimated payoff with the same loan without extras.
Inputs and definitions
- Loan amount is the amount borrowed before any fees included in the balance.
- Annual interest rate is the nominal rate used to derive twelve equal monthly rate periods.
- Term and start date set the contractual payment count and calendar. The first payment is one month after the entered start date.
- Financed fees are added to principal rather than paid separately.
- Extra payments reduce principal. A recurring amount applies monthly; a one-time amount applies to its numbered payment.
Methodology
monthly payment = principal × i(1+i)^N ÷ ((1+i)^N − 1)For each row, interest is calculated from the rounded opening balance. The scheduled payment first covers interest, and the remainder plus any extra amount reduces principal. The final row is clamped so the balance cannot fall below zero.
Payment dates use plain calendar-month arithmetic. A start day near month end is clamped to the last valid day when necessary, so a 31 January start produces a February month-end payment.
Assumptions
- The interest rate is fixed and applied as a nominal annual rate divided into twelve monthly periods.
- Payments occur monthly and on time; extra amounts are applied directly to principal without penalties.
- Financed fees increase the opening principal, while taxes, insurance, escrow, and separately paid charges are excluded.
Worked examples
Divide a zero-interest loan across twelve payments
Borrow 1,200 at 0% for twelve months, starting on 31 January 2024, with no fees or extra payments.
Calculate the payment
With no interest, divide 1,200 by twelve equal monthly periods to get 100 per payment.
Advance the calendar
The first payment lands on 29 February 2024 because the original day is clamped to that leap year's month end.
Twelve payments of 100 repay 1,200 with no interest, and the estimated final payment date is 31 January 2025.
Estimate a thirty-year fixed payment
Borrow 100,000 at a 6% nominal annual rate for 360 monthly payments with no fees or extras.
Convert the rate
Divide the 6% nominal annual rate by twelve to use a 0.5% monthly rate.
Build and reconcile the schedule
Apply the fixed payment, round each posted balance to cents, and adjust the final payment to close the remaining balance exactly.
The scheduled payment is 599.55. Under this rounding policy, total interest is 115,838.45 across 360 payments.
Limitations and common mistakes
This is an estimate, not financial advice, a disclosure, or a lender quote. A lender may use daily interest, different payment dates, different rounding, adjustable rates, or allocation rules that change the result.
The result covers fully amortising monthly principal-and-interest payments only. It does not model interest-only periods, balloon payments, delinquency, prepayment charges, escrow, or changing rates.
Frequently asked questions
Why does the interest portion fall over time?
Monthly interest is calculated from the opening balance. As principal payments reduce that balance, less interest accrues and more of a fixed payment can reduce principal.
Do extra payments change the scheduled monthly payment?
Not in this model. The original scheduled payment remains the same while extras reduce principal, which can shorten the schedule and reduce interest. A lender may instead recast a loan under separate rules.
Why might my lender's schedule differ?
Lenders may calculate interest daily, use different due-date or rounding conventions, include other charges, or apply payments under contract-specific rules. Use the lender's disclosure and statements as the authoritative record.
Does the payment include taxes or insurance?
No. The result estimates principal and interest for the entered balance. Property taxes, insurance, escrow, and other charges are outside the calculation.
Sources
- How does paying down a mortgage work? — Consumer Financial Protection Bureau (accessed )
- Extra Payments Calculator — Freddie Mac (accessed )
Method and content record
The method, examples and limitations describe how this tool works. Recorded checks do not establish independent professional review.
Record attribution, date and versions
Record attribution: ToolsOrigin calculation review.
Record date: .
Content version 1.0.0. Engine version 1.0.0.