How mortgage amortization works
Your payment stays the same each month, but its split changes. Early on, most of it is interest; near the end, most is principal. That front-loading is why even small extra payments early in the loan remove a disproportionate amount of interest — they attack the balance before interest can accrue on it.
M = P · i / (1 − (1 + i)⁻ᴺ)
i = APR / 12 · N = term × 12 · P = price − down payment
This estimate covers principal and interest only. Property tax, homeowners insurance, PMI, and HOA dues are not included and can add materially to your real monthly cost.
Frequently asked questions
- Should I take a 15-year or 30-year loan?
- A 15-year term carries a higher monthly payment but far less total interest. A 30-year term lowers the payment and keeps flexibility — you can mimic a 15-year payoff with extra payments while retaining the option to stop. Model both here.
- Do extra payments really help?
- Substantially, especially in the first decade. Enter an extra amount above to see the interest saved and the years cut from the term.
This calculator is for educational purposes only and does not constitute financial advice. It estimates principal and interest only; taxes, insurance, and fees are excluded. Confirm figures with your lender.