Mortgage Amortization Calculator,
full schedule with extra payments.

Field guide

How mortgage amortization works and why the first years are so expensive.

Every fixed-rate mortgage works the same way: you make one equal payment each month for the entire loan term, and by the last payment, the balance is exactly zero. But the composition of that payment changes dramatically over time. In early years, the vast majority goes to interest. Only in the final years does the bulk shift to principal repayment. This structure is called front-loaded amortization, and understanding it is the foundation of every meaningful mortgage decision.

The standard amortization formula

The fixed monthly payment is calculated once using the amortization formula, and then held constant for the life of the loan:

Where L is the loan principal, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the number of monthly payments (term in years × 12). For a $400,000, 30-year loan at 6.5%:

Month-by-month: how the split changes

Each month, interest is computed on whatever balance remains:
Interest = Balance × monthly_rate
Principal = Payment − Interest
New balance = Balance − Principal

On month 1 of the example above, the balance is $400,000, so interest = $400,000 × 0.5417% = $2,167 and principal = $2,528 − $2,167 = $361. Only $361 of the $2,528 payment reduces your debt. By month 180 (year 15), your balance has fallen to ~$288,000 and the split has shifted: interest is ~$1,559, principal is ~$969. By the final payment the entire amount goes to clearing the last few dollars of principal.

Front-loading visualised

The amortization schedule above shows this graphically in the “Annual” chart view: the blue interest bars dominate the early years and shrink each year, while the amber principal bars grow. This visual makes it immediately clear why the first years of a mortgage are the most expensive from an interest standpoint and why extra payments in those years have the greatest impact.

The power of extra monthly payments

An extra monthly payment reduces the principal balance immediately, which lowers the interest charge for every subsequent month. Because the interest savings compound over the remaining loan term, even a modest extra amount has an outsized effect:

Example: $400,000 loan at 6.5% for 30 years. Figures are approximate.

When does paying extra make the most sense?

• Early in the loan. Extra payments in the first few years eliminate many years of high-interest debt. The same $200/mo paid in year 1 saves roughly twice the interest of the same $200/mo paid in year 15, because it eliminates more future interest-compounding cycles.
• When no high-rate debt exists. Paying down a 6.5% mortgage makes no sense if you carry 20%+ credit card balances. Always eliminate higher-rate debt first.
• After maxing tax-advantaged accounts. 401(k) employer match and Roth IRA contributions typically generate better risk-adjusted returns than mortgage prepayment for most income levels.

30-year vs. 15-year mortgage

A 15-year mortgage typically carries an interest rate 0.5–0.75% lower than a comparable 30-year, and the loan is paid off in half the time, resulting in dramatically less total interest. The trade-off is a monthly payment roughly 40–50% higher. On a $400,000 loan:

• 30-year at 6.5%: $2,528/mo · Total interest ≈ $508,000
• 15-year at 5.8%: $3,330/mo · Total interest ≈ $199,400

The 15-year saves approximately $308,600 in interest but requires $802/mo more commitment. Many borrowers choose the 30-year and make voluntary extra payments, gaining the flexibility of the lower required payment while still cutting years off the loan.

Disclaimer

This calculator uses the standard fixed-rate amortization formula and is for educational and planning purposes only. It does not account for property taxes, homeowners insurance, PMI, or adjustable-rate terms. Actual loan terms may vary. Always consult a licensed mortgage professional before making borrowing decisions.