Amortization calculator
A standard amortising schedule. Fees, insurance, escrow and any rate change are not included, so the real schedule from a lender will differ in the detail.
An amortising loan has a level payment split between interest and principal, with the split shifting over time. On a 250,000 loan at 6.5% over 30 years, the first payment is 1,354 of interest and 226 of principal; by the final year that ratio has reversed almost entirely.
How to read an amortization schedule
The front-loading of interest is the single most consequential feature of an amortising loan, and it is why overpaying early is worth so much more than overpaying late. Every extra pound of principal paid in year one removes thirty years of interest on that pound; the same pound in year twenty-five removes five. It is also why moving house every few years means paying mostly interest for a lifetime and building equity slowly — each new mortgage restarts the schedule at its most interest-heavy point.
Questions
Repaying a loan through level payments that cover interest first and gradually shift toward principal.