Money
Amortization Calculator
Every payment dated, and what the same lump sum is worth depending on when you pay it.
The same $5,000, paid at different times
A lump sum cancels every future interest charge the balance it clears would have carried. Early, that is decades of charges; late, almost none. Paying it in month 12 saves $26,135; the same money in month 240 saves $4,433 — a factor of 5.9×.
| Paid in | Payment | Interest saved | Time saved |
|---|---|---|---|
| July 2027 | 12 | $26,135 | 1 year and 7 months |
| July 2031 | 60 | $19,310 | 1 year and 3 months |
| July 2036 | 120 | $12,779 | 11 months |
| July 2046 | 240 | $4,433 | 5 months |
If the rate is not the one you entered
Half a point either way, on the same loan over the same term.
If the rate is lower
$1,498.88
at 6% · $289,595 interest
At the rate you entered
$1,580.17
at 6.5% · $318,861 interest
If the rate is higher
$1,663.26
at 7% · $348,772 interest
Where the money goes
Scale tops out at $250,000
Amortisation schedule
341 payments, the last one in December 2054.
| Year | Interest | Principal | Balance | Paid off |
|---|---|---|---|---|
| 1 | $16,168 | $7,794 | $242,206 | 3% repaid |
| 2 | $15,646 | $3,316 | $238,889 | 4% repaid |
| 3 | $15,424 | $3,538 | $235,351 | 6% repaid |
| 4 | $15,187 | $3,775 | $231,576 | 7% repaid |
| 5 | $14,934 | $4,028 | $227,547 | 9% repaid |
| 6 | $14,664 | $4,298 | $223,249 | 11% repaid |
| 7 | $14,376 | $4,586 | $218,663 | 13% repaid |
| 8 | $14,069 | $4,893 | $213,770 | 14% repaid |
| 9 | $13,741 | $5,221 | $208,550 | 17% repaid |
| 10 | $13,392 | $5,570 | $202,980 | 19% repaid |
| 11 | $13,019 | $5,943 | $197,036 | 21% repaid |
| 12 | $12,621 | $6,341 | $190,695 | 24% repaid |
| 13 | $12,196 | $6,766 | $183,929 | 26% repaid |
| 14 | $11,743 | $7,219 | $176,709 | 29% repaid |
| 15 | $11,259 | $7,703 | $169,007 | 32% repaid |
| 16 | $10,743 | $8,219 | $160,788 | 36% repaid |
| 17 | $10,193 | $8,769 | $152,019 | 39% repaid |
| 18 | $9,606 | $9,356 | $142,663 | 43% repaid |
| 19 | $8,979 | $9,983 | $132,680 | 47% repaid |
| 20Half the debt is gone in April 2046 — payment 237 of 341. | $8,311 | $10,651 | $122,029 | 51% repaid |
| 21 | $7,597 | $11,365 | $110,664 | 56% repaid |
| 22 | $6,836 | $12,126 | $98,538 | 61% repaid |
| 23 | $6,024 | $12,938 | $85,600 | 66% repaid |
| 24 | $5,158 | $13,805 | $71,795 | 71% repaid |
| 25 | $4,233 | $14,729 | $57,066 | 77% repaid |
| 26 | $3,247 | $15,715 | $41,351 | 83% repaid |
| 27 | $2,194 | $16,768 | $24,583 | 90% repaid |
| 28 | $1,071 | $17,891 | $6,692 | 97% repaid |
| 29 | $97 | $6,692 | $0 | 100% repaid |
The formula
Worked example
$250,000 over 30 years at 6.5%, with a $5,000 lump sum
- payment = $1,580.17 a month, 360 payments
- First payment: $1,354.17 interest, $226.00 principal — 86% of it never touches the balance
- A $5,000 lump sum in month 12 saves $26,135 in interest
- The same $5,000 in month 240 saves $4,433 — nearly six times less, for identical money
Where this goes wrong
Assuming half the term means half the debt
On a 30-year loan at 6.5%, the balance does not fall below half the amount borrowed until year 22 — not year 15. For more than two decades you owe over half of what you started with, because the early payments are almost entirely interest. This is the single most surprising line in any schedule, and it is why selling a house in year eight returns so much less equity than people expect.
Questions
- What is amortisation?
- It is the process of paying a debt down through equal instalments where each one covers the interest accrued since the last, and whatever is left reduces the balance. Because the interest is charged on what remains, the split shifts over time: early payments are mostly interest, late ones mostly principal, and the payment itself never changes.
- Why does the same lump sum save so much more when paid early?
- Because an overpayment does not just remove the amount you paid — it cancels every future interest charge that amount would have carried until the end of the term. Clear $5,000 in year one of a 30-year loan and you cancel 29 years of charges on it. Clear the same $5,000 in year 20 and you cancel ten. The table above shows the gap on your own numbers.
- Is this the same as a loan payment calculator?
- They overlap and they answer different questions. A loan payment calculator tells you what the monthly figure will be. This page is about where each of those payments goes and when — the calendar month you cross half the debt, the month interest stops dominating, and what a one-off payment is worth depending on its timing.
- Does this handle business amortisation of intangible assets?
- No, and the two are worth keeping apart. Amortising an intangible asset is an accounting exercise — spreading a purchase cost across the years it is useful — with no interest and no balance to clear. This page is about debt. Mixing them into one tool would make both harder to read.
- Why do the dates matter?
- Because a payment number is not a plan. "Month 61" is hard to hold in your head; "March 2031" is something you can weigh against a job change, a school year or a lease ending. The arithmetic is identical either way — but only one of the two is a date you can act on.
- What if my loan charges for overpaying?
- Then the figures here are an upper bound on what overpaying is worth, and you should read your agreement before acting on them. Some fixed-rate loans cap annual overpayments or charge an early repayment fee, which can cancel out a good part of the saving. This page models the arithmetic, not your contract.