An amortization calculator shows how much of your monthly mortgage payment will go toward principal and interest over the life of your loan. The calculator also lets you see how much you can save by prepaying some of the principal.

Amortization Calculator Usage

With HSH.com's standard amortization calculator, you enter the features of your mortgage: amount of the principal loan balance, the interest rate, the loan term, and the month and year the loan begins. (If you have a more complex mortgage structure that doesn't fit the standard amortization calculator fields, find another mortgage calculator that better suits your needs.)

You can choose whether to see an amortization table showing the principal/interest breakdown of every monthly payment over the life of the mortgage loan, or an abbreviated table showing monthly payments for the first year and annual totals for the remaining years of the mortgage.

Calculate Your Payment Schedule

Click "calculate" to get your monthly payment amount and an amortization schedule. You'll see that most of your mortgage payment will go toward interest in the early years of the loan, with a growing amount going toward principal as the years go by--until finally almost all of your payment goes toward principal at the end. For instance, in the first year of a 30-year, $250,000 mortgage with a fixed 5% interest rate, $12,416.24 of your payments goes toward interest, and only $3,688.41 goes toward principal.

Interest Savings: The Effect of Prepayments

Now use the amortization calculator to see how prepaying some of the principal saves money over time. Enter a monthly, annual, or one-time amount for additional principal prepayment. Let's say, for example, you want to pay an extra $50 a month on a mortgage like the one above ($250,000 mortgage, 30-year fixed at 5%).

See the Savings

Enter the loan terms in the calculator and 50 in the monthly additional principal prepayment, then click "calculate." Scroll through the amortization schedule to the final summary. By paying $50 extra a month, you knock more than two years off the mortgage and save $21,299 in interest.

You may also target a certain loan term or monthly payment by using a mortgage calculator specifically for prepayments.

Of course you'll want to consult with your financial advisor about whether it's best to prepay your mortgage or put that money toward something else, such as retirement. Check out the HSH Homeowner's Guide to Prepaying Your Mortgage for more information.