Amortization Calculator
See exactly how each payment splits between principal and interest, year by year, from your first payment to your last.
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Works for any fixed-rate, fully amortizing loan — mortgage, auto, personal, or student.
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$2,076/mo
Fixed for the full loan term
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Yearly Amortization Schedule
| Year | Principal paid | Interest paid | Ending balance |
|---|
Last updated: August 6, 2026 · Reviewed by the DoCalc team
What Is Loan Amortization?
Amortization is the schedule by which a loan gets paid off through fixed, regular payments. Every payment does two jobs at once: it covers the interest that accrued on your remaining balance since the last payment, and it chips away at the principal — the actual amount you borrowed. The mix between those two jobs isn't constant. It shifts, predictably and mechanically, from mostly-interest at the start of a loan to mostly-principal at the end, even though the payment amount itself never changes on a fixed-rate loan.
This calculator builds that full year-by-year picture so you can see the shift happen, rather than just seeing a single monthly payment number in isolation.
The Formula
Where M is the fixed monthly payment, P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments (years × 12). Once M is known, each month's interest is simply balance × r, and that month's principal is M − interest. The balance for the next month is last month's balance minus that principal — repeat n times and the balance reaches exactly zero.
How the Calculation Works
Because interest is charged on whatever balance remains, the interest charge is largest on day one, when the balance is largest, and shrinks every single month after that. Since the total payment M is fixed by design, whatever isn't consumed by interest automatically goes to principal — so the principal portion grows every month by exactly the amount the interest portion shrank. That's the entire mechanism behind the classic amortization curve: a slow start on principal that accelerates sharply in the loan's final years.
This is also why refinancing or restarting a loan resets the clock in a real, costly way — a new loan at the same balance starts the interest-heavy phase all over again, even if you'd already paid down years of the original loan's principal-heavy phase.
Worked Example
A $320,000 loan at 6.75% over 30 years:
In year 1, roughly $3,410 of the $24,906 paid goes to principal — the rest, over $21,495, is interest. By the loan's final year, that ratio has almost completely flipped: most of each payment is principal, and only a sliver is interest, because the balance by then is small.
Reading the Schedule Table
| Column | What it means |
|---|---|
| Year | Which year of the loan this row summarizes |
| Principal paid | Total principal paid across that year's 12 payments |
| Interest paid | Total interest paid across that year's 12 payments |
| Ending balance | What's left to pay off after that year's final payment |
Who Should Use This Calculator
Use it if you want to see the full lifetime shape of a loan — how much interest you'll actually pay in total, how fast (or slowly) your balance actually declines, and how that changes with a different rate or term.
Pair it with the Loan Payoff Calculator if you want to model extra principal payments specifically — this calculator shows the standard, unmodified schedule.
Common Mistakes to Avoid
The most common misread is assuming a loan's balance drops in a straight line — it doesn't. Balance declines slowly at first and rapidly later, so a loan that's "halfway through its term" by time has usually paid off well under half its principal. A second mistake is refinancing purely to lower a monthly payment without checking the new amortization schedule — restarting the clock on a fresh 30-year term can mean paying more total interest even at a lower rate, if you'd already worked through several years of the old loan's principal-heavy phase.
Worth knowing: any extra payment applied directly to principal removes that amount from every future interest calculation for the rest of the loan — which is why extra payments made early in a loan save far more total interest than the same extra payment made near the end.
Expert Recommendation
Before signing on a refinance, run both the old loan's remaining schedule and the new loan's full schedule through this calculator and compare total remaining interest, not just the monthly payment — a lower payment can still cost more over time if it resets the amortization clock.
Frequently Asked Questions
What is loan amortization?
Amortization is the process of paying off a loan through fixed, regular payments where each payment covers that period's interest plus a growing portion of the principal, until the balance reaches zero at the end of the term.
Why does the interest portion shrink over time?
Interest is charged only on the remaining balance. As you pay down principal, the balance shrinks, so each period's interest charge shrinks with it — and since the total payment stays fixed, more of it goes toward principal instead.
Why is so much of my early payments interest?
Early in a loan, the balance is at its highest, so the interest charge on that balance is also at its highest. This is normal amortization behavior, not a sign of a bad loan — it happens on every fixed-rate, fully amortizing loan.
Does an amortization schedule apply to any loan?
Yes — mortgages, auto loans, personal loans, and student loans (on standard repayment plans) all amortize the same way. Only the loan amount, rate, and term differ between loan types.
How do extra payments affect the schedule?
An extra payment applied to principal reduces the balance immediately, which lowers every future period's interest charge and shortens the loan. This calculator shows the standard schedule; use the Loan Payoff Calculator to model extra payments specifically.
What's the difference between amortization and a loan balance?
Your loan balance is a single snapshot — what you owe right now. An amortization schedule is the full timeline showing how that balance declines, and how each payment splits between principal and interest, from the first payment to the last.
Why does the total interest number look so large?
Over a long term like 30 years, interest compounds on a large balance for a long time. Total interest paid can approach or even exceed the original loan amount on long, high-rate loans — shortening the term or paying extra toward principal both reduce it substantially.
Is this the same as my lender's amortization table?
It uses the same standard amortization formula lenders use, so the numbers should match closely. Your official schedule may show monthly instead of yearly rows and could reflect a slightly different first-payment date.
Conclusion
A loan's monthly payment is just one number, but its amortization schedule is the real story — how a fixed payment does completely different work in year 1 versus year 30. Seeing the full table turns an abstract interest rate into a concrete picture of exactly where your money goes.