Calculate payments, visualize amortization & model strategies
Amortization is the process of paying off a loan through regular, equal payments over time. Each payment covers the interest that has accrued since the last payment, with any remainder reducing your principal balance. In the early years of a mortgage, the vast majority of every payment goes to interest — a dynamic that reverses gradually as your balance falls.
Your fixed monthly payment (M) is calculated using the standard loan amortization formula:
Where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments. Because this formula produces a fixed payment amount, your check to the lender never changes — but the split between interest and principal shifts dramatically over time.
On a $400,000 loan at 7% for 30 years, your monthly P&I payment is about $2,661. In month one, roughly $2,333 of that goes to interest and only $328 reduces your balance. By year 15, the split is nearly even. By year 28, the majority of every payment is principal. This front-loading of interest is why paying a little extra early in the loan has such a dramatic effect on total interest paid and payoff date.
On that same $400,000 / 7% / 30-year loan, adding just $200 extra per month from the start cuts the term by about 5 years and saves over $90,000 in interest. A single $10,000 lump sum in year one saves more than the same lump sum in year 20, because the earlier payment prevents years of compounding interest on that balance. Use the Early Payoff Strategy panel to model your specific numbers.
Private Mortgage Insurance (PMI) is required by most conventional lenders when your down payment is less than 20% of the home price. It protects the lender — not you — in the event of default. PMI typically costs 0.5% to 1.5% of the loan amount per year, added to your monthly payment. Under the Homeowners Protection Act, lenders must automatically cancel PMI when your loan-to-value ratio reaches 78% based on the original amortization schedule. Amortly tracks this milestone and shows you exactly when PMI drops off.
Enter your home price, down payment, annual interest rate, and loan term in the New Mortgage calculator. Your principal & interest payment appears instantly. Toggle on property tax, home insurance, HOA fees, and PMI to see your complete monthly housing cost. For a $350,000 home with 10% down at 6.75% for 30 years, your P&I payment would be approximately $2,043 per month.
This depends on your loan amount, interest rate, and term. For a $320,000 30-year loan at 6.5%, you would pay roughly $408,000 in total interest over the life of the loan — more than the original principal. A 15-year term at the same rate cuts that interest roughly in half, though your monthly payment is significantly higher. The Amortization Schedule in Amortly shows cumulative interest paid at every point in your loan.
Quite a lot, especially early in the loan. On a $400,000 / 7% / 30-year mortgage, an extra $300/month from day one saves approximately $120,000 in interest and cuts your payoff date by over 8 years. Even a single $5,000 lump sum in year one saves several thousand dollars in interest. Use the Early Payoff Strategy panel to model your exact scenario.
A 30-year mortgage has lower monthly payments but you pay far more interest over the life of the loan. A 15-year mortgage has higher payments but you build equity much faster and pay dramatically less interest — typically 15-year rates are also 0.5% to 0.75% lower than 30-year rates, which amplifies the savings. The right choice depends on your cash flow needs and financial goals. Use the New Mortgage calculator to compare both side by side.
A refinance makes sense when the interest savings over your expected remaining time in the home exceed the closing costs, which typically run 2%–5% of the loan amount. A common rule of thumb is that refinancing is worth it if you can lower your rate by at least 1% and plan to stay in the home long enough to recoup closing costs — usually 2–4 years. Use the Refinance Modeler to calculate your specific break-even point.
An amortization schedule is a complete table of every loan payment from the first to the last, showing how much of each payment goes to principal and how much goes to interest, plus your remaining balance after each payment. It's the most complete view of how your loan pays down over time. Amortly generates a full amortization schedule instantly and lets you view it month-by-month or year-by-year.
Amortly uses the standard loan amortization formula used by lenders industry-wide, so the principal & interest calculations are mathematically precise for fixed-rate loans. Property tax, insurance, HOA, and PMI estimates are based on your inputs and may differ from actual lender quotes. Always verify your final numbers with a licensed mortgage professional before making any financial decisions.
Yes, Amortly is completely free. No account is required, no personal information is collected, and all calculations run directly in your browser. Your loan data never leaves your device.
Understanding mortgage terminology helps you make better decisions. Here are the most important terms you'll encounter when shopping for or managing a home loan.