Amortization Calculator
See exactly where every payment goes. Get your monthly payment plus a year-by-year schedule showing principal paid, interest paid, and remaining balance.
| Year | Principal paid | Interest paid | Ending balance |
|---|
How loan amortization works
A fixed-rate loan is repaid with equal monthly payments computed from the amortization formula:
Each month, the lender first charges interest on the current balance (balance × monthly rate). Whatever is left of your payment reduces the principal:
Principalmonth = Payment − Interestmonth
Monthly payment: $2,022.62
Month 1 interest: 320,000 × (0.065 ÷ 12) = $1,733.33
Month 1 principal: 2,022.62 − 1,733.33 = $289.29
Only 14% of the first payment reduces the loan — but by the final year, over 95% of each payment goes to principal.
Reading your amortization schedule
The year-by-year table above shows three things worth watching. First, the crossover point — the year when your payments start putting more toward principal than interest (around year 19 on a 30-year loan at 6.5%). Second, equity growth: the ending balance column tells you how much of the home you actually own, which matters for removing PMI or borrowing against home equity. Third, the total interest figure — often more than the loan itself on long terms, which is why extra payments are so powerful early in the schedule.
Frequently asked questions
What is amortization?
Paying off a loan with equal periodic payments, where each payment covers the period's interest first and the remainder reduces the principal. The interest share shrinks and the principal share grows with every payment.
Why is most of my early payment interest?
Interest is charged on the remaining balance, which is largest at the start. On a $320,000 loan at 6.5%, the first month's interest alone is $1,733 of a $2,023 payment.
How can I pay less total interest?
Shorter term, lower rate, or extra principal payments. Even one extra payment a year on a 30-year mortgage typically cuts 4–5 years off the schedule — model it with the mortgage payoff calculator.
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Note: Estimates use the standard fixed-rate amortization formula and assume no fees, escrow, or rate changes. Not financial advice. Last reviewed: July 2026.