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What Is Mortgage Amortization?
Mortgage amortization is the process of paying off a home loan through fixed monthly payments over a set term, usually 15 or 30 years.
Each payment is split into:
- Principal – the amount that reduces your loan balance
- Interest – the cost of borrowing money
At the beginning of a mortgage, most of your payment goes toward interest. Over time, more of your payment applies to principal, gradually accelerating the payoff.
How This Amortization Calculator Works
This tool automatically calculates:
1. Monthly principal + interest (P&I)
Based on your:
- Loan amount
- Interest rate
- Loan term
It uses the industry-standard amortization formula.
2. Total interest paid
You’ll see how much interest you will pay over the life of the loan and how much you can save by making extra payments.
3. Loan payoff timeline
The schedule lists:
- Monthly payment
- Principal paid
- Interest paid
- Remaining balance after each payment
4. The effect of extra principal payments
Adding even $25–$100 extra each month can:
- Shorten your loan term
- Reduce total interest significantly
- Help you reach full payoff years earlier
The calculator shows these savings instantly.
Understanding Your Amortization Schedule
Monthly Payment
Your monthly mortgage payment is fixed (for fixed-rate loans), but the ratio of principal vs. interest changes each month.
Principal Portion
Increases gradually as the loan balance decreases.
Interest Portion
Decreases over time because interest is calculated on the remaining balance.
Remaining Balance
The loan balance falls slowly at first, then accelerates as more of your payment goes toward principal.
Early Payoff Strategy
Applying additional payments directly to principal has the strongest impact early in the loan term.
15-Year vs. 30-Year Mortgage: Amortization Comparison
30-Year Loan
- Lower monthly payment
- Higher total interest cost
- Slower principal payoff
15-Year Loan
- Higher monthly payment
- Much lower total interest
- Faster equity build-up
If you’re deciding between loan terms, use the calculator to compare total interest and payoff speed for each option.
How Extra Payments Affect Your Mortgage
Making extra payments – monthly, annually, or occasionally – can:
- Reduce total interest paid
- Shorten your payoff date
- Build equity faster
Examples:
Extra $50/mo → save thousands in interest
Extra $100/mo → cut years off your loan
One-time lump sum → immediate principal reduction
Use the extra payment field in the calculator to see your personalized results.
Frequently Asked Questions (FAQs)
What is included in an amortization schedule?
Your schedule includes payment number, total payment, principal paid, interest paid, and remaining balance.
Why does interest cost more early in the loan?
Interest is calculated on the outstanding balance. Since the balance is highest at the beginning, interest is largest during the early years.
Do extra payments reduce interest?
Yes. Extra payments reduce principal, lowering future interest charges and shortening your loan term.
Should I refinance based on my amortization schedule?
If your remaining term, interest rate, or monthly payment no longer suits your financial goals, refinancing may be beneficial.
Can I download the amortization schedule?
Yes – use the Download PDF Report button to get a full printable version.