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Loan Amortization Calculator (Mortgage & Auto)

This professional-grade Amortization Calculator computes your monthly payment and generates a financial summary of your loan. Ideal for analyzing mortgages, auto loans, and personal loans.

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FAQ

What is the difference between APR and Interest Rate?
The Interest Rate is the cost of borrowing the principal amount. The APR (Annual Percentage Rate) includes the interest rate PLUS other costs like broker fees, discount points, and closing costs, making it a more accurate measure of total cost.
Why is my first payment mostly interest?
This is how amortization works. Interest is calculated on the remaining balance. At the start, your balance is high, so the interest charge is high. As you pay down the principal, the interest portion shrinks.
Should I choose a 15-year or 30-year mortgage?
A 15-year mortgage has higher monthly payments but saves you a massive amount in interest and builds equity faster. A 30-year mortgage offers lower monthly payments, giving you more cash flow flexibility, but costs much more in the long run.
Does this include taxes and insurance?
No. This calculator computes 'Principal and Interest' (P&I). To get your full PITI (Principal, Interest, Taxes, Insurance) payment, you must add your estimated monthly property tax and homeowners insurance premiums.

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Mastering the Loan Amortization Formula

Amortization is the process of spreading out a loan into a series of fixed payments over time. While the payment amount remains constant, the components of that payment shift dramatically. **The Standard Formula:** M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ] Where: * **M** = Total monthly payment * **P** = Principal loan amount * **i** = Monthly interest rate (Annual Rate / 12) * **n** = Number of months (Loan Term in Years × 12) This formula ensures that by the final payment, your balance reaches exactly zero.

The 'Front-Loaded' Interest Trap

Many borrowers are shocked to see their first mortgage statement. On a $300,000 loan at 6% over 30 years, your first payment of roughly $1,800 will see about $1,500 go straight to interest, with only $300 reducing your debt. This is not a scam; it is math. You owe interest on the outstanding balance. Since the balance is highest at the start, the interest charge is highest. This emphasizes the value of making **extra principal payments** early in the loan term, which can shave years off your timeline.

Strategic Debt: 15-Year vs. 30-Year Mortgages

Choosing a loan term is a balance of risk and cost. **30-Year Fixed:** * **Pros:** Lower monthly obligation, easier to qualify for, cash flow for other investments. * **Cons:** You might pay 2x the house price in total interest. **15-Year Fixed:** * **Pros:** Lower interest rates usually available, forced savings, debt-free significantly sooner. * **Cons:** Higher monthly commitment. If you lose your job, the higher payment is a liability. **Financial Tip:** You can simulate a 15-year mortgage with a 30-year loan by voluntarily making the higher payment. This gives you the flexibility to drop back to the lower payment if finances get tight.

Impact of Interest Rates

Interest rates are the single biggest factor in the total cost of your loan. On a $400,000 mortgage: * At **4%**, total interest is ~$287,000. * At **7%**, total interest is ~$558,000. A 3% difference nearly doubles the cost of the loan. This highlights the importance of shopping for rates and improving your credit score before applying.

Data Privacy & Security

In an era where digital privacy is paramount, we have designed this tool with a 'privacy-first' architecture. Unlike many online calculators that send your data to remote servers for processing, our tool executes all mathematical logic directly within your browser. This means your sensitive inputs—whether financial, medical, or personal—never leave your device. You can use this tool with complete confidence, knowing that your data remains under your sole control.

Accuracy and Methodology

Our tools are built upon verified mathematical models and industry-standard formulas. We regularly audit our calculation logic against authoritative sources to ensure precision. However, it is important to remember that automated tools are designed to provide estimates and projections based on the inputs provided. Real-world scenarios can be complex, involving variables that a general-purpose calculator may not fully capture. Therefore, we recommend using these results as a starting point for further analysis or consultation with qualified professionals.

Fact-checked and reviewed by CalcPanda Editorial Team
Last updated: January 2026
References: WHO Guidelines on BMI, World Bank Financial Standards, ISO Calculation Protocols.
Loan Amortization Calculator with Schedule | Principal vs Interest