Amortisation calculator

An amortisation calculator is a financial tool designed to assist businesses in understanding and planning the repayment of loans over time. It helps seeking clarity on your repayment journey and making informed financial decisions.

Ian Hawkins

Page written by Ian Hawkins. Last reviewed on May 17, 2024. Next review due March 1, 2025.

20 years

This calculator is intended for illustration purposes only and exact payment terms should be agreed with a lender before taking out a loan.

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How payments change over the life of a 20 year loan

Amortization schedule breakdown

What is an amortisation?

Amortisation is the process of spreading out a loan into fixed payments over time, where each payment covers both the principal amount and the interest accrued.

How to calculate amortisation?

To calculate amortisation, you can use the amortisation formula, which involves determining the periodic payment amount based on the loan amount, interest rate , and loan term.

What is an amortisation schedule?

An amortisation schedule is a detailed table or spreadsheet that outlines the systematic repayment of a loan over time. It provides a comprehensive breakdown of each loan payment, specifying how much of each payment goes toward reducing the principal amount and how much is allocated to cover interest expenses. 

The schedule outlines each installment payment into two primary components:

    • Principal payment: The portion of the payment that goes towards reducing the outstanding loan amount.
    • Interest payment: The amount allocated to cover the interest accrued on the remaining loan balance

Furthermore, the schedule displays the remaining balance of the loan at the beginning and end of each period. As the loan is repaid, the outstanding balance gradually decreases. Additionally, it provides transparency into the total cost of borrowing and can be a valuable tool for comparing different loan options. 

How to create an amortisation schedule?

To create an amortisation schedule, list out each payment period, calculate the payment amount for each period using the amortisation formula, and track the allocation of each payment towards the principal and interest.


The formula for the amortisation factor depends on the specific context. In the context of loan amortisation, the amortisation factor is used to calculate the periodic payment amount based on the loan amount, interest rate, and loan term. It is typically derived from the annuity formula.

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