What Is Amortization Schedule?
An amortization schedule is a table that shows every monthly payment over the life of your loan, broken down into how much goes toward principal and how much goes toward interest. Early payments are mostly interest; later payments are mostly principal.
Key Facts
- In a 30-year loan, you'll pay more in interest than principal for roughly the first 20 years.
- Extra payments go directly toward principal and can dramatically shorten your loan.
- The total interest paid on a 30-year loan often exceeds the original loan amount.
- Shorter loan terms (15 years) mean higher payments but far less total interest.
Real-World Example
On a $585,000 loan at 6.75% for 30 years, your first payment of $3,794 splits roughly $3,291 to interest and just $503 to principal. By year 20, it flips — about $2,100 goes to principal and $1,694 to interest.
Why It Matters
Understanding your amortization schedule helps you see where your money goes each month. It also shows the powerful impact of making extra payments — even an extra $200/month can save tens of thousands in interest and cut years off your loan.
En Español
Un calendario de amortización es una tabla que muestra cada pago mensual durante la vida de tu préstamo, desglosado en cuánto va hacia el principal y cuánto va hacia los intereses. Los pagos iniciales son mayormente intereses; los pagos posteriores son mayormente principal.