Amortization Calculator with Extra Payments

What is amortization?

Amortization is the process of paying off a loan with equal, regular payments over a set period. Each payment covers the interest owed for that month, and the rest goes toward the principal — the amount you borrowed. Because interest is charged on the remaining balance, early payments are mostly interest, and later payments are mostly principal. An amortization schedule shows exactly how every payment is split and what you still owe after each one.

The amortization formula

The fixed monthly payment is M = P × r ÷ (1 − (1 + r)⁻ⁿ), where P is the loan amount, r is the monthly interest rate (the annual rate divided by 12) and n is the number of monthly payments. For each month, interest = balance × r, principal = M − interest, and the new balance = old balance − principal. The calculator repeats this for every payment to build the full schedule. This is the method used by U.S. mortgages, auto loans, personal loans and student loans. (Canadian fixed-rate mortgages compound semi-annually; use our Canadian mortgage calculator for those.)

How extra payments save money

Any amount you pay above your regular payment goes straight to principal. That lowers the balance that interest is charged on for every remaining month, so a small extra payment early in a loan has a big effect. You can model two kinds:

• Extra monthly payment: a fixed amount added to every payment, such as rounding $2,212 up to $2,400.
• One-time payment: a lump sum such as a tax refund or bonus, applied with the payment number you choose.

Another popular approach is making half-payments every two weeks, which adds up to one extra monthly payment a year. Before prepaying, check that your loan has no prepayment penalty and ask your lender to apply extra amounts to principal. If you have high-interest debt such as credit cards, paying that off first usually saves more.

Reading the schedule

The yearly table totals the principal and interest you pay in each year and shows the balance at year-end; open the monthly schedule for every individual payment. Your monthly payment here covers principal and interest only. For a mortgage, your actual payment will also include property tax, homeowners insurance and possibly PMI or HOA dues — see the full picture with our mortgage calculator.

Worked example

A $350,000 mortgage at 6.5% for 30 years has a payment of $2,212.24 a month for principal and interest. Over the full term you'd pay about $446,400 in interest — more than the amount borrowed. In the first payment, about $1,896 goes to interest and only $316 to principal.

Adding $200 a month pays the loan off in about 23 years and 10 months — 6 years and 2 months sooner — and saves about $108,100 in interest. Even $100 a month saves about $62,600 and takes 3½ years off the loan.

Frequently asked questions

Sources & methodology

This calculator was last reviewed on November 2, 2026. Figures are based on the following official and primary sources:

• Consumer Financial Protection Bureau – What is amortization?

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