Home Loan Amortization Schedule Calculator

A home loan amortization schedule shows how each scheduled payment is divided between interest and principal, and how the balance changes over time. Enter the loan amount, annual percentage rate (APR), and term to calculate the level monthly payment and total interest; the schedule itself can then be built by applying the same balance calculation month by month.

Formula

The calculator uses the standard fixed-payment loan formula. First, it finds the monthly payment from the principal, monthly interest rate, and number of monthly payments:

PMT = round[P × r ÷ (1 − (1 + r)⁻ⁿ), 2]

• PMT is the monthly principal-and-interest payment, in dollars.
• P is the amount borrowed, in dollars.
• r is the monthly rate as a decimal: APR ÷ 1,200. For an 8% APR, r = 0.08 ÷ 12.
• n is the number of monthly payments: loan term in years × 12.

Total interest is calculated as PMT × n − P. Because the payment is rounded to cents first, this total uses the rounded monthly payment. Actual loan statements can differ slightly because of payment dates, daily interest methods, rounding, or other contract details.

Worked Example

Using the calculator’s default values, the loan amount is $20,000, APR is 8%, and term is 5 years. The monthly rate is 0.08 ÷ 12 = 0.0066667, and there are 5 × 12 = 60 payments.

1. Monthly payment before rounding = $20,000 × 0.0066667 ÷ [1 − (1.0066667)⁻⁶⁰] ≈ $405.53.
2. Monthly payment rounded to cents = $405.53.
3. Total of scheduled payments = $405.53 × 60 = $24,331.80.
4. Total interest = $24,331.80 − $20,000 = $4,331.80.

Assumptions

• The rate is fixed for the full term.
• Payments are made monthly, at the end of each period, with the first payment one month after borrowing.
• Interest compounds monthly at APR ÷ 12.
• The calculation excludes fees, taxes, insurance, mortgage insurance (PMI), escrow, and any optional extra payments.

How a Home Loan Schedule Works

At the start of each payment period, interest accrues on the outstanding principal. The interest portion of that month’s payment is the balance multiplied by the monthly rate. The remaining portion reduces principal. As the balance falls, the interest charge generally falls too; with a fixed payment, more of each later payment goes toward principal.

For example, on the default loan, the first month’s interest is approximately $20,000 × 0.0066667 = $133.33. Of the $405.53 payment, about $272.20 reduces principal, leaving a balance near $19,727.80. A full schedule repeats these steps for every payment, usually showing payment number or date, starting balance, payment, interest, principal, and ending balance. Small discrepancies can arise from cent rounding.

“Amortization” means repayment through scheduled installments over time. A schedule is a projection based on its inputs, not necessarily a copy of a lender’s official ledger. For an adjustable-rate loan, a rate change can alter future interest and payments, so a schedule assuming one unchanging rate will no longer represent the full loan.

Reading the Numbers and Building the Schedule

The monthly payment shown here covers principal and interest only. A mortgage bill may also include other amounts, such as property-related charges or insurance, depending on the loan arrangement. Those items do not pay down the loan principal and are not represented by this calculation.

To create a month-by-month schedule, use the prior month’s ending balance as the next month’s starting balance. Calculate interest on that balance, subtract the interest from the fixed payment to get principal repaid, then subtract that principal from the starting balance. The final payment may need a small adjustment to bring the balance to zero if rounding leaves a few cents outstanding.

• Starting balance: principal still owed before the payment.
• Interest: starting balance multiplied by the monthly rate.
• Principal: payment minus interest.
• Ending balance: starting balance minus principal paid.

These steps assume the payment exceeds the period’s interest. With the specified positive APR and standard level-payment formula, the scheduled payment is set to repay the balance over the chosen term.

What Changes the Result

Loan amount, APR, and term all affect the payment and total interest. A larger principal raises the payment when other inputs stay fixed. A higher APR increases the interest charged each month. A longer term generally spreads repayment across more months, which can lower the required monthly principal-and-interest payment while increasing the number of periods over which interest accrues. These are mathematical effects, not a judgment about which loan structure suits a particular person.

Enter the note rate or APR specified for the loan consistently with the lender’s payment illustration. Do not treat the calculator’s 8% default as a market figure or a suggested rate; it is only a sample input. If the lender quotes a different rate, term, or amount, replace the defaults. APR may reflect certain borrowing costs differently from the interest rate used to accrue monthly interest, so a lender’s disclosed payment may not exactly match a calculation that treats APR as the periodic-rate basis.

Common Misunderstandings and Limits

• Payment is not the same as total housing cost. This result excludes taxes, insurance, escrow, fees, and other charges unless entered separately.
• Early payments are not mostly “wasted” on interest. Interest is calculated on the remaining balance; the principal portion still reduces what is owed.
• Extra payments are not included. Additional principal payments can change the balance path and total interest, but their timing and any loan-specific handling need separate modelling.
• Rounding matters over many months. This calculator rounds the monthly payment to cents and multiplies that figure by the number of payments. A lender may calculate interest or round each period differently.
• Not every home loan has a fixed schedule. Variable rates, interest-only periods, balloon amounts, payment holidays, and other features are outside this simple formula.

For a personalized payoff projection, compare the inputs and calculation conventions with the lender’s amortization disclosure or servicing information. A quoted schedule can include details this estimate does not model.

Frequently Asked Questions

What is an amortization schedule for a home loan?
An amortization schedule is a table showing each scheduled payment, the amount applied to interest and principal, and the remaining loan balance over time.

How do I calculate the principal portion of a mortgage payment?
For a standard monthly schedule, subtract that month’s interest from the principal-and-interest payment. Monthly interest is the starting balance multiplied by the monthly rate; the remainder reduces principal.

Why does the interest portion get smaller over time?
With a fixed rate and regular payments, the outstanding principal declines. Since interest is calculated on that balance, the interest charge generally declines as well, leaving more of the fixed payment for principal.

Does this home loan calculator include taxes and insurance?
No. It estimates principal and interest only. Taxes, insurance, mortgage insurance, escrow, fees, and other charges are not included.

Will making extra payments change the amortization schedule?
Yes. If an extra amount is applied to principal, the balance can fall faster and later interest charges can be lower. This calculator assumes only the scheduled level payment and does not model extra-payment timing or loan-specific rules.

The result is an estimate, and the lender’s disclosure gives the exact figures.

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in p | Loan amount | $ | 20000 | 1 | 100000000
in apr | Interest rate (APR) | % | 8 | 0.01 | 100
in yrs | Loan term | years | 5 | 0.0833 | 50
out pmt | Monthly payment | $ | round(p * (apr / 1200) / (1 - (1 + apr / 1200) ^ -(yrs * 12)), 2) | 2
out int | Total interest | $ | pmt * yrs * 12 - p | 2