Amortization Calculator: Schedule & Payoff

Amortization Calculator: Schedule, Formula & Extra Payments

A $400,000 balance at 6.5% for 30 years runs about $2,528 a month and roughly $510,000 in interest over the full term. Build the same kind of table for your loan, optional extras included.

What the calculator returns

Fixed principal, rate, and term produce a month-by-month table: payment, interest slice, principal slice, and remaining balance. You also get total interest paid, the month principal first beats interest (the tipping point), and how recurring or lump-sum extras change both.

Worked example:

Same $320,000 note over 15 vs. 30 years: the 30-year is easier on monthly cash flow but pays more than double the interest of the 15-year by the end. Read total interest and payoff date together, not just the monthly payment.
What this misses:

Taxes, insurance, PMI, ARMs, interest-only structures, and balloon payments. For full PITI, use the mortgage calculator.
One thing worth knowing:

Mark extra payments as principal-only on your servicer statement. Some servicers park unmarked extras as advance future payments instead of reducing principal, which kills the time savings. The tipping-point month is the most useful frame for deciding whether an extra $200 is more valuable now than later.

How Loan Amortization Works: Formula Guide

The Amortization Formula Explained

Amortization calculates fixed payments that fully repay a loan over a set term. Each payment covers that month's interest plus a portion of principal. The formula ensures the loan reaches zero at the final payment.

Monthly Payment Formula:

$M = P \times \frac{i(1+i)^n}{(1+i)^n - 1}$
where M = monthly payment, P = principal (loan amount), i = monthly interest rate (annual rate ÷ 12), n = total number of payments (years × 12)
Example Calculation:

$400,000 loan at 6.5% for 30 years: i = 0.065 ÷ 12 = 0.005417, n = 360 payments. M = $400,000 × [0.005417(1.005417)³⁶⁰] / [(1.005417)³⁶⁰ – 1] = $2,528.27/month.
Interest Portion Formula:

$\text{Interest}_{\text{month}} = \text{Balance} \times i$
Each month's interest is calculated on the current remaining balance. As balance decreases, interest decreases and more payment goes to principal
Principal Portion Formula:

$\text{Principal}_{\text{month}} = M - \text{Interest}_{\text{month}}$
Whatever remains after interest is applied to principal reduction. This is why the principal portion grows over time as interest shrinks
Scope & limits:

Fixed-rate amortization only; extras modeled as principal reductions. Runs in your browser. Confirm big decisions with your lender or advisor.

Understanding the Payment Split Over Time

Same payment amount each month; the interest share shrinks as the balance falls.

Year 1 Payment Allocation ($400K at 6.5%):

Monthly payment: $2,528. First payment: $2,167 interest (86%) + $361 principal (14%). After 12 payments, you've paid $30,339 but only reduced principal by $4,449. The lender received $25,890 in interest.
Year 15 Payment Allocation:

Same $2,528 payment, but now: $1,264 interest (50%) + $1,264 principal (50%). You've reached the "tipping point" where principal and interest are equal.
Year 30 Payment Allocation:

Final payment: $14 interest (0.5%) + $2,514 principal (99.5%). Nearly all of your payment now builds equity. Total interest paid over 30 years: $510,177 on a $400,000 loan.

Extra payment strategies

Extra monthly payments

Steady extras on a $400,000 loan at 6.5% for 30 years (baseline total interest about $510,177):

+$100/month Extra:

Total interest: $465,000 (saves $45,000). Payoff: 25.5 years (saves 4.5 years). Effective return: 6.5% guaranteed on every extra dollar.
+$200/month Extra:

Total interest: $428,000 (saves $82,000). Payoff: 22.3 years (saves 7.7 years). Monthly cash flow increase after payoff: $2,728 ($2,528 + $200 you were paying extra).
+$500/month Extra:

Total interest: $340,000 (saves $170,000). Payoff: 16.8 years (saves 13.2 years). You'll own your home free and clear in half the original term.
Key Insight:

Extra payments must be applied to principal only, not "future payments." Some lenders apply extra payments incorrectly, verify your statement shows principal reduction, not advance payment credit.

Lump sum timing

The same $10,000 principal payment lands differently depending on when you send it:

$10,000 in Year 1:

Interest saved: $24,800. Time saved: 14 months. Every dollar saves $2.48 in future interest because it stops compounding for 29 years.
$10,000 in Year 10:

Interest saved: $12,100. Time saved: 11 months. Still valuable, but only 20 years of compound prevention remain.
$10,000 in Year 20:

Interest saved: $4,200. Time saved: 8 months. Only 10 years of interest savings, and the balance is already much lower.
Strategic Timing:

If choosing between paying $10,000 in year 1 vs. investing it, your mortgage rate is the guaranteed return rate. At 6.5%, you'd need consistent 6.5%+ investment returns to beat the mortgage paydown.

Bi-weekly math

Bi-weekly plans usually work because you pay thirteen monthly equivalents per year, not because payday rhythm is special.

The Math:

26 bi-weekly payments ÷ 2 = 13 monthly payment equivalents per year. You're making one extra full payment annually. On a $2,528 payment, that's $2,528 extra principal per year.
Savings on $400K at 6.5%:

Total interest: $420,000 (saves $90,000). Payoff: 24.6 years (saves 5.4 years). Equivalent to paying $211 extra monthly ($2,528 ÷ 12).
DIY Alternative:

Add 1/12 of your payment ($211 on a $2,528 payment) to each monthly payment. Achieves identical results without bi-weekly program fees. Some banks charge $300-$500 for bi-weekly "enrollment."
Cash Flow Consideration:

Bi-weekly means 26 payments per year vs. 12 monthly. Two months per year will have 3 payment withdrawals instead of 2. Ensure your budget can handle the irregular cash flow.

15 vs 20 vs 30 years on $400,000

Term trade-offs (illustrative rates)

Shorter terms usually mean higher payments and less total interest. Illustrative comparison:

30-year at 6.5%:

About $2,528/month; ~$510,177 interest; ~$910,177 total paid. Lowest payment, most interest over time.
20-year at 6.25%:

About $2,922/month (+$394); ~$301,280 interest; saves ~$209,000 vs the 30-year example above.
15-year at 5.875%:

About $3,349/month (+$821); ~$202,820 interest; saves ~$307,000 vs the 30-year example.
Rate note:

Shorter terms often quote 0.25–0.75% lower than 30-year pricing, which adds to the savings beyond fewer payments.

PMI cancellation

When PMI can drop

PMI covers the lender when you put less than 20% down. These are the usual thresholds:

Automatic Termination (78% LTV):

PMI automatically cancels when your loan balance reaches 78% of the original purchase price, based on the original amortization schedule. No action required, but this may take 10-11 years on a 30-year loan.
Borrower-Requested Cancellation (80% LTV):

You can request cancellation at 80% LTV through principal paydown. You must be current on payments with good payment history. Some lenders require written request; others have online forms.
Appraisal-Based Cancellation:

If your home has appreciated significantly, a new appraisal can establish higher value, lowering your LTV. If original LTV was 90%+, you typically need 75% current LTV. Appraisals cost $400-$600.
PMI Cost Impact:

PMI typically costs 0.5-1% of loan amount annually. On $400,000: $2,000-$4,000/year ($167-$333/month). Eliminating PMI 5 years early saves $10,000-$20,000. Factor this into your extra payment strategy.

FAQ

What is loan amortization?

Amortization is the process of paying off a loan through fixed monthly payments that cover both principal and interest. Each payment stays the same, but the split changes over time: early payments are mostly interest (because the balance is highest), while later payments are mostly principal as the balance decreases.

How do I calculate my monthly mortgage payment?

Use the formula: M = P × [i(1+i)^n] / [(1+i)^n – 1], where M = monthly payment, P = loan principal, i = monthly interest rate (annual rate ÷ 12), and n = total number of payments. For a $400,000 loan at 6.5% for 30 years: i = 0.065/12 = 0.00542, n = 360, M = $2,528/month.

What is the principal tipping point?

The tipping point is when your monthly principal payment first exceeds your interest payment. For a 30-year mortgage at 6.5%, this occurs around year 10-12. Before this point, most of your payment benefits the lender; after, most builds your equity. Understanding this helps explain why early extra payments are so powerful.

How much can I save with extra principal payments?

On a $400,000 loan at 6.5% for 30 years: Extra $100/month saves ~$45,000 and cuts 4-5 years. Extra $200/month saves ~$75,000 and cuts 7-8 years. A $10,000 lump sum in year 1 saves ~$25,000 in interest. Earlier payments save more because they reduce the balance that accrues interest for longer.

Should I pay down my mortgage or invest?

Compare your mortgage rate to expected investment returns. If your rate exceeds 6-7%, paying down principal is a guaranteed return at that rate. If rates are lower (3-4%), investing in diversified funds (historically 7-10% returns) may yield more over time. Consider risk tolerance: mortgage payoff is guaranteed; investment returns are not.

When can I cancel PMI on my mortgage?

PMI automatically cancels at 78% loan-to-value (LTV) based on the original schedule. You can request early cancellation at 80% LTV through principal paydown or home appreciation (may require appraisal). On a $400,000 home with 10% down, reaching 80% LTV saves $150-$300/month in PMI costs.

Amortization Calculator: Interest-Efficiency Model

Loan terms

Early payoff

Principal tipping point

Interest vs. principal

Amortization schedule

Principal vs interest over time

Four things worth knowing

Early payments skew to interest

Extra dollars count more early

Bi-weekly equals one extra month

Refinance resets the curve