Amortization Calculator

Amortization is the process of paying off a loan through regular payments over time. Each payment covers interest first, with the remainder reducing principal. Early payments are mostly interest; later payments are mostly principal.

A $300,000 mortgage at 7% for 30 years costs ~$418,000 in total interest — more than the loan itself. This is because you owe interest on the full balance for decades. Paying even $100 extra per month can save tens of thousands.

A 15-year mortgage has higher monthly payments but saves enormous interest — typically 50-60% less total interest than a 30-year. A 30-year has lower payments with more flexibility, but much higher lifetime cost.

Extra payments go entirely to principal, reducing your balance and future interest charges. On a $300k mortgage at 7%, paying $200/month extra can pay off the loan 7 years early and save $85,000+ in interest.

A balloon mortgage has smaller monthly payments with one large final payment (the balloon). Common in commercial real estate and some auto loans. The risk: you must refinance or pay the lump sum when it comes due.