Mortgage Amortization Schedule

An amortisation schedule is the month-by-month ledger of a loan: what you paid, how much of it was interest, how much reduced the balance, and what is left. Lenders produce one for every mortgage, and reading it once explains a great deal about why loans feel the way they do.

The shape is the same for every fixed-rate loan. In the first year of a thirty-year mortgage at a typical rate, the great majority of each payment is interest and only a small slice touches the principal. By the halfway point the split is roughly even. In the final years almost everything goes to principal. Over the whole term, the total interest can approach or even exceed the amount you originally borrowed — an uncomfortable fact that the monthly figure conceals.

That front-loading is why extra payments early are worth so much more than the same money later. Every dollar of principal you retire stops accruing interest for the rest of the loan's life. Paying an extra hundred dollars a month from the start of a thirty-year mortgage can shorten the term by several years and save tens of thousands in interest, because you are removing compounding interest from the far end of the schedule. The same extra payment made in year twenty-five saves almost nothing.

Two practical notes. First, make sure any extra payment is applied to principal and not treated as an early instalment of next month's payment — some servicers default to the latter unless you specify. Second, compare the interest saved against other uses of the money: paying down a mortgage at six per cent is a guaranteed six per cent return, which is attractive, but it is also illiquid, since the money is locked in your house.

The figures here assume a fixed rate with no fees, escrow changes or rate resets. Adjustable-rate mortgages, extra fees and changing taxes will shift the real schedule, so treat this as a planning tool rather than a statement.

This calculator returns estimates for general information only. It is not financial, investment, tax or legal advice, and it cannot replace guidance from a qualified professional who knows your circumstances. Figures such as loan payments, investment growth and retirement projections are simplified models based on the inputs and assumptions you provide, not guarantees of future results.