Amortization Schedule

How to use the amortization schedule

1. Enter the Loan amount, the Annual interest rate (%) and the term in Years and Months.
2. Choose the Payment frequency (Monthly, Semi-monthly, Bi-weekly, Weekly, Quarterly or Annually) and the Compounding. Keep Same as payments for most loans; choose Semi-annually (Canadian mortgage) for a Canadian fixed-rate mortgage.
3. Set the First payment date to see a date on every row, or clear it to number the payments only. Pick the Currency used for display.
4. Under Extra payments, add any prepayments: - Extra on every payment, Starting at payment # (for example 13 to start in the second year); - Extra once a year, paid with the last payment of each year of the loan; - One-time payments: click Add a one-time payment, then enter the Payment # and the Amount. Use Remove to delete a line.

The summary shows the Regular payment, the Number of payments, when the loan is Paid off, the Total interest, the Interest saved and Time saved thanks to the extras, the Total extra payments and the Total paid. The table lists Every payment or one row per year (By year), with the Paid, Extra, Interest, Principal and Balance columns. Download CSV saves the table for a spreadsheet, and Print opens a clean, full-length version of the schedule (every row, without the page around it) that you can print or save as a PDF from the print dialog.

How the schedule is calculated

The rate per payment is i = r / n when interest compounds with each payment, or i = (1 + r/m)^(m/n) − 1 for another compounding frequency m (m = 2 for Canadian mortgages). The regular payment is the level annuity payment:

P = L × i / (1 − (1 + i)^−N)

where L is the loan amount and N the number of payments. For each row, the interest is the balance × i, rounded to the cent. The payment first covers that interest; the rest, plus any extra, reduces the principal. The last payment is adjusted so the balance ends at exactly zero, and an extra payment is never allowed to overpay the loan.

Example: $300,000 at 5% over 25 years, paid monthly with interest compounded monthly, costs $1,753.77 a month and $226,131.04 of interest. Adding $200 to every payment ends the loan after 246 payments instead of 300, 4 years and 6 months earlier, and saves $46,351.24 of interest.

Why extra payments save so much

Early in a loan, most of each payment is interest because the balance is high. Every dollar of prepayment removes a dollar of principal that would have been charged interest for the rest of the loan. That is why a small recurring extra early on often saves more than a larger lump sum near the end. The regular payment stays the same: the loan simply ends sooner.

Before prepaying a mortgage, check your prepayment privileges. Many Canadian lenders allow 10% to 20% of the original amount per year and a payment increase of the same order; beyond that, a penalty may apply. This tool does not calculate penalties.