Amortization Schedule Calculator
Amortization FormulaGenerate a complete payment-by-payment schedule showing principal, interest, and balance for every month of your loan.
| # | Payment Date | Beg. Balance | Scheduled Payment | Extra Payment | Principal | Interest | End Balance | Cum. Interest |
|---|
How an Amortization Schedule Works
What is Amortization?
Amortization is the process of spreading a loan into a series of fixed payments over time. Each payment covers the interest owed for that period, with the remainder reducing the principal balance.
Early in the loan, most of each payment is interest. As the balance falls, a growing share goes to principal — this is why extra payments early in the term save the most interest. The mortgage calculator gives you the baseline monthly payment to start from.
The Formula
Monthly payment: M = P·r(1+r)ⁿ / ((1+r)ⁿ−1)
Where P = principal, r = monthly rate (annual÷12), n = total months.
Each period: Interest = Balance × r, Principal = M − Interest, New Balance = Balance − Principal.
Extra Payments
Any extra payment goes entirely to reducing the principal, which cuts future interest. Even a modest extra monthly payment — say £100 on a £200,000 30-year mortgage at 4% — saves over £20,000 in interest and pays the loan off 3+ years early.
The earlier in the term you make extra payments, the greater the compounding benefit. For a focused extra-payment payoff calculator, try the mortgage payoff calculator.
Reading the Schedule
The Beginning Balance is what you owe at the start of each period. The Scheduled Payment is the fixed monthly amount. Principal (green) and Interest (amber) show how that payment is split. Cumulative Interest is the running total of all interest paid to date. For a side-by-side comparison of simple and compound interest costs, try the interest calculator.
Worked example
A £200,000 loan at 4.5% over 20 years gives a monthly payment of £1,265. Over the full term you repay £303,600 in total — of which £103,600 is interest. In month 1, only £415 reduces the principal; by month 200, over £1,000 per payment goes to principal as the balance falls.
Related calculations
For a vehicle rather than a property, the auto loan calculator adds sales tax, fees and a trade-in before building the same schedule. To compare several rates at once, use the loan payment table.
Using a Schedule Against a Real UK Mortgage
Overpayment limits on fixed deals
Most UK fixed-rate mortgages allow you to overpay up to a set share of the outstanding balance each year — commonly 10% — without penalty. Go beyond it during the fixed period and an early repayment charge applies, often a percentage of the amount repaid that steps down each year of the deal. Before acting on the savings this schedule projects, check your lender's annual allowance and ERC terms; the arithmetic assumes overpayments are free of charge.
Shorter term or lower payment?
When you overpay, lenders usually let you choose between reducing the term and reducing the monthly payment. Reducing the term saves far more interest, because the balance falls while the payment stays high. Reducing the payment gives you monthly breathing room but hands much of the saving back. Lenders often default to the second, so it is worth stating which you want in writing.
The schedule assumes one rate for the whole term
A 25-year schedule at today's rate is a model, not a prediction. Most UK borrowers hold a fixed rate for two to five years and then remortgage onto whatever is available. Treat the early years of the schedule — the fixed period you can actually see — as the reliable part, and the rest as an illustration of shape rather than a forecast of cost. Re-run it at each remortgage with the new rate and the balance you have reached.
Interest is usually calculated daily
Most UK lenders now charge interest on the daily balance rather than the annual one, so an overpayment starts saving interest immediately rather than at the next anniversary. This makes the timing of a lump sum matter: paying early in the month, or as soon as a bonus arrives, saves marginally more than waiting. A monthly schedule like this one is a close approximation, and the difference against a daily-interest account is typically small but always in your favour.
Evidence & Methodology
How This Page Is Grounded
Method
Calculates a level payment, then separates each payment into interest and principal until the loan balance reaches zero.
Important limitation: Models a fixed-rate, fully amortising loan; real lender schedules can differ because of fees, day-count rules and rounding.
Primary Sources
- How mortgage amortization works Consumer Financial Protection Bureau
Quality Checks
Schedule totals and final balance checked across several rates and terms.
See how sources are selected and corrections are handled in our Editorial & Calculation Methodology, and which automated checks this page has to pass in How We Test.
Frequently Asked Questions
What is loan amortization?
Amortization is the process of spreading a loan into a series of fixed payments over time, where each payment covers the interest owed for that period with the remainder reducing the principal. Early payments are mostly interest; later payments shift towards principal — the amortization schedule calculator shows this split for every payment.
Why do extra payments early in the loan save so much interest?
Any extra payment goes directly to reducing the principal, which cuts future interest charges. Even a modest extra monthly payment — for example £100 on a £200,000 30-year mortgage at 4% — can save over £20,000 in interest and pay the loan off 3+ years early.
How do I read an amortization schedule?
Each row shows the beginning balance, your scheduled payment, and how it splits between principal (reducing your debt) and interest (the lender's charge), plus the cumulative interest paid to date. The beginning balance column shows your outstanding debt falling with every payment.