What amortization means
An amortized loan is paid off with equal monthly payments over a set term. Each payment covers that month's interest first, and whatever is left reduces the balance. Because interest is charged on the remaining balance, the early payments are mostly interest and the later ones are mostly principal. An amortization schedule lists every payment and shows that split.
How the payment is calculated
The monthly payment comes from the standard formula M = P · r(1+r)ⁿ / ((1+r)ⁿ − 1), where P is the loan amount, r is the annual rate divided by 12, and n is the number of payments. Each month, interest equals the balance times r, rounded to the cent the way lenders do it. The rest of the payment, plus any extra you add, comes off the balance.
How extra payments save money
Every extra dollar goes straight to principal, so it stops being charged interest for the rest of the loan. That's why even small extra payments early on cut years off a mortgage. This calculator lets you add three kinds of extra payment: a fixed amount every month, a yearly lump sum such as a tax refund, and a one-time payment in any month you choose.
The schedule is grouped by calendar year, so the yearly interest totals line up with the Form 1098 interest statement your lender sends each January.
Example
A $300,000 loan at 6.5% for 30 years has a payment of $1,896.20. In the first month, $1,625.00 goes to interest and only $271.20 to principal. Over the full term you'd pay about $382,637 in interest. Paying an extra $150 a month pays the loan off in 293 months instead of 360, more than 5½ years sooner, and saves about $83,920 in interest.
Frequently asked questions
Is it better to make extra payments monthly or once a year?
Monthly extra payments save slightly more, because the money starts reducing interest sooner. A yearly lump sum of the same total gets you most of the benefit and can be easier to budget.
Will my lender apply extra payments to principal?
Most do, but it's worth checking. Many servicers have a box or option labeled “additional principal.” Otherwise the extra may be treated as an early next payment.
What is the tipping point on a loan?
It's the month when more of your payment goes to principal than to interest. On a 30-year mortgage at today's rates it often takes 15 to 20 years to reach it, and extra payments bring it closer.
Can I export the schedule?
Yes. Use “Copy as CSV” and paste the full schedule into Excel or Google Sheets.