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Amortization Calculator Guide
See how a loan is paid off over time. An amortization schedule shows how each payment splits between interest and principal, and how the balance falls year by year until it reaches zero.
Early payments are mostly interest; later payments are mostly principal. The monthly payment stays the same, but the split shifts toward principal as the balance shrinks.
What Is an Amortization Schedule?
It is a month-by-month (shown here year-by-year) breakdown of a loan. For a $320,000 loan at 6.5% over 30 years, the payment is about $2,023, and you pay roughly $408,000 in interest over the full term.
Why the Early Years Cost More
Interest is charged on the outstanding balance, which is highest at the start. That is why the first years of a mortgage build equity slowly, and why extra principal payments early on save the most interest.
These results are estimates for education and planning, not financial advice. Actual returns, rates, and terms vary — check with a qualified professional before making decisions.
Related: Mortgage Calculator, Loan Payment, and Mortgage Payoff.
Frequently Asked Questions
What is loan amortization?
The process of paying off a loan with regular equal payments, where each payment covers interest first and the rest reduces the principal.
Why is most of my early payment interest?
Interest is based on the remaining balance, which is largest at the beginning, so early payments are mostly interest.
How can I pay less interest?
Making extra principal payments, especially early, or choosing a shorter term reduces the total interest you pay.
What is the total cost of the loan?
It is the sum of all payments — the original principal plus all the interest charged over the life of the loan.
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