Amortization Calculator
Monthly
$0.00
Total Paid
$0
Total Interest
$0
Year-by-Year Amortization Schedule
| Year | Principal | Interest | Total Paid | Balance |
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What is an Amortization Schedule?
An amortization schedule is a complete table of periodic loan payments that shows how each payment is split between interest and principal repayment. Early in the loan, most of each payment goes toward interest. Over time, that shifts — by the final years, nearly all of each payment reduces the principal balance.
How Amortization Works
Each monthly payment is fixed. The interest portion equals the remaining balance multiplied by the monthly rate. The rest reduces principal. As principal falls, so does interest — which means more of each subsequent payment chips away at the balance.
Tips for Paying Off Your Loan Faster
- Making one extra mortgage payment per year can shave 4–5 years off a 30-year mortgage.
- Biweekly payments (half your monthly payment every two weeks) result in 26 half-payments — effectively 13 full payments per year instead of 12.
- Even a small extra amount each month, applied directly to principal, reduces the balance faster and cuts total interest paid.
- Check that your loan has no prepayment penalty before making extra payments.
Frequently Asked Questions
Why does the first year pay so little principal?
Because your interest is calculated on the full outstanding balance. At the start of a 30-year $320,000 loan at 6.8%, the first month's interest alone is about $1,813 — leaving only $280 of a $2,093 payment to reduce principal. This ratio gradually reverses over the life of the loan.
What is negative amortization?
Negative amortization occurs when a loan payment is less than the interest owed — so the unpaid interest gets added to the principal balance, making the debt grow. This calculator assumes standard fixed payments that always cover interest, which avoids negative amortization.
How does refinancing affect amortization?
Refinancing restarts the amortization clock with a new loan, new rate, and new term. Even if you refinance to a lower rate, choosing a new 30-year term means you pay interest for another 30 years. Compare total interest paid, not just monthly payment, when evaluating a refinance.