Amortization Calculator
Work out the monthly payment on any fixed-rate loan and see how much of each payment goes to interest versus principal.
Monthly payment
£1,199.10
- Total paid over loan
- £431,676.38
- Total interest
- £231,676.38
- First payment — interest portion
- £1,000.00
- First payment — principal portion
- £199.10
- Balance after 15 years
- £142,097.69
Every payment is the same size, but early payments are mostly interest and later payments are mostly principal. Halfway through the term you have typically paid off far less than half the principal — that is the shape of amortisation.
How to use this calculator
Enter the original loan amount, the annual interest rate, and the term in years. The calculator returns the fixed monthly payment, the total amount paid across the life of the loan, the total interest, the split between interest and principal in your very first payment, and the balance you would still owe at the midpoint of the term.
How the calculation works
The monthly payment uses the standard amortisation formula P = L × r / (1 − (1+r)^−n), where L is the principal, r is the monthly rate (annual ÷ 12), and n is the total number of payments (years × 12). The remaining balance after k payments is L(1+r)^k − P((1+r)^k − 1)/r — that is how the midpoint balance is derived. Each month, the interest portion is the current balance × r, and the rest pays down principal, so the principal share grows as the loan matures.
Worked example
A 200,000 loan at 6% over 30 years gives a monthly payment of about 1,199.10. Total paid is about 431,676, of which 231,676 is interest. The very first payment splits roughly 1,000 interest and 199 principal — and after 15 years (the midpoint) the borrower still owes about 142,000 of the original 200,000.
Frequently asked questions
What is an amortizing loan?
An amortizing loan is one where each scheduled payment covers both the interest accrued that period and a portion of the original principal, so the balance is fully paid off by the end of the term. Mortgages, car loans, and most personal loans work this way — credit cards and interest-only loans do not.
Why is so much of my early payment going to interest?
Interest each month is charged on the remaining balance, which is highest at the start. So in the early years, most of the fixed payment is interest and only a small slice reduces the principal. As the balance falls, less interest accrues and the principal share of each payment grows — by the final year, almost all of every payment is principal.
Does this calculator work for mortgages, car loans, and personal loans?
Yes. The amortisation formula is the same whether the loan is a 30-year mortgage, a 5-year car loan, or a 3-year personal loan. Enter the principal, the annual interest rate, and the term in years. For loans quoted in months, divide by 12 (for example a 60-month auto loan is 5 years).
What happens if I make extra payments?
This calculator assumes only the scheduled payment is made. Any extra principal payment goes straight to the balance, which means less interest accrues from the next month onward and the loan finishes earlier. A small extra payment each month can shorten a 30-year mortgage by several years and save tens of thousands in interest — model it by reducing the term to see the effect on the monthly payment, or reduce the principal manually.
Is amortization the same as depreciation?
No. Amortisation here refers to paying down a loan with fixed periodic payments. In accounting, "amortisation" can also refer to spreading the cost of an intangible asset over time, and "depreciation" is the equivalent for tangible assets. This calculator is about loan amortisation only.
Why does the balance fall so slowly at first?
Because interest is charged on the balance, and the balance is highest early on. On a 30-year mortgage at typical rates, you usually still owe well over half the principal at the 15-year midpoint. The "Balance after N years" figure in the breakdown shows this directly so you can see where you would stand mid-term.