Loan Amortization Calculator
See how each payment splits between principal and interest over the life of your loan
Base payment: $1,499 per mo
360 months · Jul 2056
53.7%
Payment Breakdown
Remaining Balance
PAYMENT INSIGHT
- Principal
- $249
- Interest
- $1,250
- Principal
- $1,491
- Interest
- $7
On a $250,000 loan at 6.0% over 30 years, you'll pay $1,499 per month and $289,595 in interest — 53.7% of every dollar goes to the lender, not your equity. Your payment doesn't flip to mostly-principal until month 223 (year 19).
Adding $100 per month more saves $51,572 in interest and pays off the loan 54 months early.
What Is Loan Amortization?
This loan amortization calculator shows how fixed monthly payments split between principal and interest over time. Amortization is the process of paying off a loan through equal periodic payments. Each payment covers interest on the remaining balance plus a portion of principal. Early payments are mostly interest; later payments are mostly principal — even though the monthly amount stays the same.
This front-loaded interest structure is why your loan balance barely moves in the first few years. The same curve applies to 30-year mortgages, 5-year auto loans, and fixed-rate personal loans — any equal-payment amortization works this way. An amortization schedule shows exactly how much of each payment goes to principal versus interest, month by month.
How Monthly Payments Are Calculated
For a fixed-rate loan, lenders use the standard amortization formula to determine your monthly payment:
M = P × [ r(1 + r)n / ((1 + r)n − 1) ]Why Early Payments Are Mostly Interest
Interest is calculated on your remaining balance, and your balance is highest at the start. On a $250,000 mortgage at 6.0%, month 1 allocates about $1,250 to interest and only $249 to principal — 83% of that first payment goes straight to the lender.
The stacked chart above makes this visible: wide red (interest) areas in early years gradually shrink as blue (principal) areas grow. Even after five years of on-time payments on a 30-year loan, you've paid off only about 6% of the principal. By month 180 on that $250,000 mortgage at 6.0%, interest falls to about $891 per payment while principal reaches $608 — still not half, which is why the crossover arrives much later.
The Crossover Point: When Payments Shift to Principal
Every amortized loan has a crossover point — the specific month when principal first exceeds interest in a single payment. On a $250,000 loan at 6.0% over 30 years, it arrives around month 223 (year 19). Before that month, more than half of every payment goes to the lender as interest — which is why selling or refinancing early often means you've paid far more interest than principal. After the crossover, more of each payment actually builds your equity.
The chart above marks this crossover with a vertical line. Extra payments made before the crossover have the greatest impact — they reduce the balance during the period when interest dominates each payment. A $100 monthly prepayment starting in year 1 saves far more than the same $100 starting in year 20, because the earlier you reduce principal, the more compounding works in your favor on every future payment.
How Extra Payments Change the Math
Extra payments go 100% to principal, which reduces the balance that future interest is calculated on. A $100 per month prepayment on a $250,000, 6.0%, 30-year loan can save over $50,000 in interest and cut about 4 years off the term. Raise it to $200 per month and savings often exceed $85,000 with 7+ years shaved off; even $50 per month saves roughly $29,000. Adjust the Extra Monthly Payment input above to see exact figures for your loan.
If you have multiple high-interest debts (credit cards, personal loans), compare strategies with our Debt Payoff Calculator — avalanche vs. snowball may save more than prepaying a low-rate mortgage.
Frequently Asked Questions
- Why is so much of my early payment going to interest?
- Interest is calculated on your remaining balance, which is highest at the start. On a $250,000 mortgage at 6.0%, roughly $1,250 of your first $1,499 payment is interest — only $249 goes to principal. The crossover point, when principal first exceeds interest in a single payment, typically arrives around year 19 on a 30-year loan. Extra principal payments accelerate reaching that point.
- How much can I save by making extra payments?
- On a $250,000 mortgage at 6.0%, adding $100 per month saves roughly $50,000 in interest and pays off the loan about 4 years early. The savings compound because reducing the balance today means less interest tomorrow, so more of each future payment goes to principal. Use the Extra Monthly Payment input above to see exact savings for your loan.
- What is the difference between amortization and simple interest?
- Amortization spreads repayment into equal installments where each payment's principal-to-interest ratio shifts over time — heavily interest-loaded early, principal-loaded late. Simple interest charges only on the current remaining balance with no front-loading structure. Most mortgages and auto loans use amortization; some personal loans use simple interest. On the same rate and term, a simple-interest loan usually costs less total interest.
- When does my payment flip to mostly principal?
- That flip is the crossover point — the month when principal first exceeds interest in a single payment. On a $250,000 loan at 6.0% over 30 years, it arrives around month 223 (year 19). Shorter terms or lower rates reach it much sooner: a 15-year mortgage at 6.0% crosses over around year 5. The chart above marks your exact crossover month with a vertical line.
- Should I prepay my mortgage or tackle other debts first?
- If you carry higher-rate debts — credit cards at 22% or personal loans at 12% — paying those first (the avalanche method) typically saves more than prepaying a 6% mortgage. Once high-rate debt is cleared, extra mortgage payments become the next best use of cash. Compare your options with our Debt Payoff Calculator to see which path saves the most interest.