Negative Amortization Balance Calculator

This calculator projects that growth one payment period at a time. Enter the starting balance, nominal annual interest rate, scheduled payment, number of periods, and payment frequency. The result shows the ending balance, cumulative interest, total payments, balance increase, and a transparent schedule that separates each period's accrued interest from the unpaid amount added to the debt.

Understand why the balance grows

Negative amortization occurs when a lender charges more interest during a period than the borrower pays. Suppose a loan begins at 200,000 and accrues 1,000 of interest in its first month, but the scheduled payment is only 500. The unpaid 500 is not forgiven. It is added to the balance, making the next month's opening balance 200,500. Interest is then calculated on that larger amount, so the shortfall can increase over time even when the payment never changes. This calculator makes that compounding visible rather than reporting only a final number. For every period, the schedule lists the opening balance, interest accrued, payment, unpaid interest, and ending balance. A growing balance can affect a future refinance, a loan-to-value threshold, or a contractual balance cap, so the projection is useful even when the low scheduled payment is temporary. The calculation assumes the payment is made after interest accrues, which is the common end-of-period convention.

Enter rates and periods consistently

Enter the annual interest rate as a percentage: use 6 for six percent, not 0.06. The calculator converts that nominal annual rate to a periodic rate by dividing by 100 and then by the selected number of payments per year. With monthly payments, use 12 payments per year; with biweekly periods, use 26; with weekly periods, use 52. The number of periods is the projection horizon in those same units. Twelve periods with a monthly frequency means one year, while twelve periods with a weekly frequency means twelve weeks. The scheduled payment must be less than the first period's accrued interest, because this tool is specifically designed for negative amortization scenarios. If the payment equals or exceeds that interest, use a conventional amortization calculator instead. Results use a fixed rate and fixed payment for the entire horizon. They do not model adjustable-rate resets, fees, escrow, payment recasting, promotional expiration, capitalization events on a different timetable, or lender-specific rounding rules.

Interpret the projection and test alternatives

Start with the ending balance and balance growth to see the overall effect of the payment shortfall. Total interest accrued is the sum of every period's interest charge, while total payments is simply the scheduled payment multiplied by the period count. Their difference equals the amount added to principal over the projection, subject only to displayed decimal rounding. The detailed schedule helps identify how quickly the unpaid-interest amount expands as the balance compounds. Try several scenarios to understand sensitivity: raise the payment while keeping it below first-period interest, shorten the period count, or compare plausible interest rates. A small change can matter over a long horizon because every capitalized shortfall can itself generate later interest. Treat the result as a deterministic planning estimate, not a lender statement or payoff quote. Actual loan documents may impose maximum-balance limits, defer some capitalization, change the rate, or require a larger payment after a trigger. Confirm those rules before making a borrowing, refinancing, or budgeting decision based on the projection.