Month-by-Month Amortization Table

What Is Loan Amortization?

When you take out a loan, whether for a house, a car, or anything else, you make the same monthly payment every month. But here is the surprising part: even though your payment stays the same, the split between principal and interest changes every single month.

In the early months, most of your payment goes toward interest (the bank’s profit). In the later months, most of your payment goes toward principal (actually paying off what you owe).

Think of it like a seesaw. At the start, interest is heavy and principal is light. Over time, they gradually swap places.

The Monthly Payment Formula

M = P × [r(1+r)^n] / [(1+r)^n - 1]

Where:

• M = Monthly payment amount
• P = Principal (the total loan amount you borrowed)
• r = Monthly interest rate (annual rate divided by 12)
• n = Total number of monthly payments (loan term in years × 12)

How Each Monthly Payment Is Split

For any given month:

• Interest portion = Remaining Balance × Monthly Rate
• Principal portion = Monthly Payment - Interest Portion
• New Balance = Previous Balance - Principal Portion

This is why the schedule matters. On a $300,000 mortgage at 6.5% over 30 years, your first payment of $1,896.20 splits as:

• Interest: $1,625.00 (86% of the payment)
• Principal: $271.20 (14%)

The seesaw tips slowly, and slower than most people picture. Here is the same $1,896.20 at four points in the loan:

Look at year 20. Two-thirds of the way through a 30-year mortgage, you still owe $166,996 of the $300,000, and the payment has only just tipped past halfway to principal. The crossover, the first payment that puts more into principal than into interest, is number 233 of 360, not number 180.

That gap between where people think they are and where they are is the whole reason to print the table.

Worked Example

Loan amount: $200,000 Annual interest rate: 6% Loan term: 30 years (360 months)

Monthly rate: 6% / 12 = 0.5% = 0.005 Number of payments: 30 × 12 = 360

Monthly payment = $200,000 × [0.005 × (1.005)^360] / [(1.005)^360 - 1] Monthly payment = $1,199.10

Total paid over 30 years: $1,199.10 × 360 = $431,676 Total interest paid: $431,676 - $200,000 = $231,676

That means you pay more in interest than the original loan amount! This is why understanding amortization is so important.

Why This Calculator Is Useful

• Home buyers: See exactly how much interest you will pay over the life of a mortgage
• Refinancing decisions: Compare your current schedule with a new loan to see if refinancing saves money
• Extra payments: Understanding amortization helps you see why even small extra payments toward principal can save thousands in interest
• Financial planning: Know exactly when your loan will be paid off

Important Terms