Calculate your periodic mortgage or loan payments, see the impact of extra payments, and estimate how much interest you can save.

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    How to Use This Calculator

    Understanding Amortization & Interest Savings

    When you take out a loan, each periodic payment is split between paying off the principal (the amount you borrowed) and paying the interest (the cost of borrowing).

    1. Early Years: Most of your payment goes towards interest, meaning your loan balance decreases very slowly.
    2. Later Years: As the outstanding balance drops, the interest portion shrinks, and more of your payment goes towards the principal.
    3. The Power of Extra Payments: Because interest is calculated based on your remaining principal, making even small extra payments directly targets the principal. This reduces the balance faster, compounding your interest savings over the remainder of the loan term.

    The Math Behind It

    The tool uses the following mathematical principle:

    $$ M = P \frac{r(1+r)^N}{(1+r)^N - 1} $$

    Where:

    • $M$ is the Periodic Payment.
    • $P$ is the Loan Principal (total borrowed amount).
    • $r$ is the Periodic Interest Rate (Annual Rate / Frequency).
    • $N$ is the Total Number of Payments (Years $ imes$ Frequency).