Amortization Schedule

What Is an Amortization Schedule?

An amortization schedule is a detailed table that shows every payment on a loan from the first month to the last. For each payment, it breaks down exactly how much goes toward principal (paying down the balance) and how much goes toward interest (the cost of borrowing). At the end of every row, you see the remaining loan balance — a number that gradually drops to zero.

The word "amortization" comes from the Latin mort, meaning death — you're slowly "killing off" the debt with each payment. Understanding this schedule is one of the most powerful financial literacy tools available, because it reveals the true cost of any loan and helps you make smarter decisions about extra payments, refinancing, and loan comparisons.

How Amortization Works

Most mortgages and installment loans use a fixed-rate, fully amortizing structure. This means your monthly payment stays the same for the life of the loan, but the split between principal and interest changes every month. In the early years, the vast majority of your payment goes toward interest because the outstanding balance is highest. As the balance decreases, less interest accrues, and more of your payment goes toward principal.

For example, on a $250,000 mortgage at 6.5% for 30 years, your first payment of $1,580 would include roughly $1,354 in interest and only $226 in principal. By the halfway point (month 180), the split is much more even. By the final years, nearly the entire payment is principal.

The Power of Extra Payments

One of the most impactful things you can do with a mortgage is make extra payments toward principal. Even modest extra contributions — $100 or $200 per month — can shave years off your loan and save tens of thousands of dollars in interest. This is because every extra dollar reduces the principal balance, which reduces the interest charged in every subsequent month. It's a compounding effect that works in your favor.

Use the "Extra Monthly Payment" slider above to see exactly how much time and money different amounts save you. The comparison cards and savings highlight make the impact instantly clear.

When to Consider Refinancing Instead

If interest rates have dropped significantly since you took out your loan, refinancing may achieve even bigger savings than extra payments alone. Use our Refinance Calculator to see if the math works out — factoring in closing costs and how long you plan to stay in the home. Many homeowners combine refinancing with extra payments for maximum impact.

How to Read the Amortization Table

Our amortization schedule organizes payments by year for easy scanning. Click on any year row to expand and see all 12 monthly payments within that year. The columns show:

• Principal — Total amount that went toward reducing your balance that year
• Interest — Total interest charges for the year
• Extra — Any extra payments you added (shown when extra payment is greater than zero)
• End Balance — What you still owe at the end of the year

The area chart above the table provides a visual representation of the famous "amortization crossover" — the point where principal payments exceed interest payments. This crossover typically happens between years 18 and 22 on a 30-year mortgage, but extra payments push it much earlier.