How amortization works
On a fixed-rate loan every payment is the same size, but its composition changes every month. Interest is charged on whatever is still outstanding, so early payments are mostly interest and late ones are mostly principal.
Subtract the principal portion from the balance, and repeat. That single loop, run to a zero balance, is the whole schedule — and it is the same engine behind the mortgage and car-loan tools on this site, so identical inputs give identical answers wherever you enter them.
Worked example: $250,000 at 6.5% over 30 years
The payment is $1,580.17 a month. In the first month, interest is $250,000 × 6.5% ÷ 12 = $1,354.17, leaving only $226.00 to reduce the balance. Principal does not exceed interest until payment 233, in year 20. Over the full term the loan costs $318,862 in interest — $568,862 repaid in all.
The first five years
| Year | Interest | Principal | Balance at year end |
|---|---|---|---|
| 1 | $16,167.73 | $2,794.31 | $247,205.69 |
| 2 | $15,980.59 | $2,981.45 | $244,224.24 |
| 3 | $15,780.93 | $3,181.11 | $241,043.13 |
| 4 | $15,567.86 | $3,394.18 | $237,648.95 |
| 5 | $15,340.57 | $3,621.47 | $234,027.48 |
After five years of $1,580.17 payments, the balance has fallen by only $15,973 of the $250,000 borrowed. The full table is above, and downloads as a CSV.
Frequently asked questions
Why is almost all of an early payment interest?
Interest is charged on the balance still outstanding, and at the start that balance is the whole loan. On $250,000 at 6.5%, the first payment of $1,580.17 is $1,354.17 interest and only $226.00 principal. Principal does not overtake interest until payment 233.
How much does paying extra actually save?
On the same loan, $200 extra a month clears it in 22 years 1 month instead of 30 years and cuts total interest from $318,862 to $221,243 — a saving of $97,618. Every extra dollar goes straight to principal, so it stops accruing interest for the rest of the term.
Is the CSV export free?
Yes, and it always will be. The file is generated in your browser from the table on the page — nothing is uploaded, nothing is stored, and there is no account to create.
Does this work for car and personal loans too?
Yes. Any fixed-rate, fixed-payment loan amortizes the same way, so the same schedule applies to mortgages, car loans, personal loans and student loans. Only the amount, rate and term change.
Related tools
- Mortgage calculator — the same engine, plus taxes, insurance and PMI
- Auto loan calculator — car payments on the same schedule
- Credit card payoff — why revolving debt behaves differently