Generate a complete month-by-month amortization schedule. See exactly how much of each payment goes to principal vs interest, your remaining balance at any point, and how extra payments change your payoff date.
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How amortization works
Amortization is the process of paying off a loan through regular scheduled payments over time. Each payment covers the month's interest first, then reduces the principal balance. Because interest is calculated on the remaining balance, early payments are mostly interest — but as the balance falls, a larger share of each payment goes to principal.
Monthly interest = Remaining balance × (Annual rate ÷ 12) Principal paid = Monthly payment − Monthly interest New balance = Previous balance − Principal paid
Worked example: first 3 payments on $360,000 at 6.8%
Month
Payment
Interest
Principal
Balance
1
$2,344
$2,040
$304
$359,696
2
$2,344
$2,038
$306
$359,390
3
$2,344
$2,036
$308
$359,082
After 3 payments ($7,032 paid), only $918 has come off the balance. $6,114 went to interest. This is the core reason why extra principal payments are so powerful in the early years.
The power of extra principal payments
Extra/month
Payoff
Total interest
Interest saved
$0 (base)
30 years
$484,968
—
$100/month
27 yr 2 mo
$428,410
$56,558
$200/month
24 yr 10 mo
$381,204
$103,764
$500/month
19 yr 8 mo
$285,840
$199,128
$1,000/month
14 yr 3 mo
$184,392
$300,576
Common mistakes to avoid
Not knowing how your lender applies extra payments. Some lenders apply extra payments to future scheduled payments rather than to principal. Specify in writing that extra payments should be applied to principal only, or your extra payment just prepays next month's bill without reducing total interest.
Making extra payments without an emergency fund. Funnelling every extra dollar into mortgage principal before having 3-6 months of expenses saved is a mistake. A job loss could force you to miss mortgage payments despite all that extra equity — and missed payments damage your credit regardless of your equity position.
Ignoring the refinance opportunity. If rates fall to 5.5-5.9% and you hold a 6.8% mortgage, refinancing saves more per dollar than extra payments. Check refinance break-even before committing to a long-term extra payment strategy at current rates.
Choosing a 30-year and assuming you will make extra payments. Most people intend to pay extra but do not follow through consistently. If you can genuinely afford the 15-year payment, the forced schedule of a 15-year loan is more reliable than voluntary extra payments on a 30-year.
A complete table showing every loan payment broken down into principal (balance reduction) and interest (lender fee). Early payments are mostly interest; late payments are mostly principal. The schedule shows your balance at any point in the loan.
How much of my first mortgage payment is interest?
On a $360,000 mortgage at 6.8%, your first monthly payment of $2,344 is split approximately $2,040 interest (87%) and $304 principal (13%). This ratio gradually shifts over the loan life until final payments are almost entirely principal.
How much does one extra mortgage payment per year save?
One extra full payment per year on a 30-year mortgage at 6.8% reduces the term to approximately 25 years and saves roughly $80,000-$100,000 in interest depending on the loan size. Biweekly payments achieve the same effect automatically.
Can I see my amortization schedule from my lender?
Yes. Lenders are required to provide a Loan Estimate and Closing Disclosure that includes amortization information. Your online account should also show your current balance and payment breakdown. The Ratixa calculator generates the same schedule for any loan parameters instantly.
Does the amortization schedule change if I make extra payments?
Yes. Every extra principal payment immediately reduces your balance, which reduces future interest charges. The schedule recalculates a new payoff date and total interest. Enter your extra monthly payment in the calculator above to see the full updated schedule.