Amortization Calculator

How Amortization Works on a Fixed-Rate Mortgage

Every payment is split by applying the current interest rate to the remaining balance; whatever's left over reduces principal. Because the balance is highest at the start, interest dominates early payments — on a 30-year loan, it can take over half the term before the principal portion starts to exceed the interest portion in the monthly split.

Biweekly Payments: An Easy Way to Pay Off Faster

Paying half your monthly payment every two weeks results in 26 half-payments a year — the equivalent of 13 full monthly payments instead of 12. That one extra payment a year can cut several years off a 30-year term and save tens of thousands of dollars in interest, without a large change to your monthly budget.

Escrow, Property Taxes, and Insurance

Your mortgage servicer often collects one-twelfth of your annual property tax and homeowners insurance with each payment, holding it in an escrow account. This calculator focuses on principal and interest only — escrow additions vary by county and policy and should be added separately.

Worked Example: $300,000 Over 30 Years at 6.8%

On a $300,000 mortgage at 6.8% over 30 years, the monthly principal-and-interest payment is $1,955.78.

Over the full 360 payments you would pay $404,079.20 in interest — more than the original loan amount — for a total of $704,079.20.

Switching to biweekly payments (half the monthly amount every two weeks) adds the equivalent of one extra monthly payment per year, shortening the term by roughly four to five years and saving tens of thousands of dollars in interest.

Payment = P × [r(1+r)^n] / [(1+r)^n − 1], where P = loan amount, r = monthly interest rate (annual rate ÷ 12), n = total number of monthly payments

Fixed-Rate vs Interest-Only

This calculator models a standard fully-amortizing fixed-rate loan. Some U.S. mortgage products offer an interest-only period at the start, during which the balance doesn't fall at all — payments are lower initially, but the loan must fully amortize over a shorter remaining term once the interest-only period ends, so the payment jumps.

Prepayment Penalties in the U.S.

Under the Truth in Lending Act (Regulation Z §1026.43(g)), most Qualified Mortgages originated since 2014 cannot carry a prepayment penalty at all, and the small number of non-QM loans that do must cap it and disclose it clearly. In practice, the great majority of U.S. mortgage borrowers can pay extra or pay off the loan in full at any time with no fee — always check your note and closing disclosure to confirm.