For equal loan payments, this type of amortization is common for most mortgages, auto loans and typical loans. Over the life of the loan, payments remain constant (equal installments) while the principal portion increases and the interest portion decreases.
Create a printable amortization schedule when you amortize a loan or mortgage. For example, you are taking a mortgage for $125,000 at 3.5% interest over 30 years (360 monthly payments), enter these values into the calculator to get a schedule of your monthly payments (principal plus interest) for the next 360 months.
Most amortized loans, like this calculator, are done with equal payment amounts that are applied to principal and interest. Constant payments. With each payment the principal is reduced so the interest owed decreases with each payment therefore, the principal part paid with each payment increases.
Payment Amount = Principal Part + Interest Part
A loan can also be amortized with constant principal payments. In this case, since the principal part remains the same as you pay off the loan, the interest you are charged decreases, so your monthly payment also decreases.
The basic calculation for the amortization schedule uses our mortgage payment calculator.