See your monthly payment breakdown for principal, interest, taxes, and insurance (PITI) in a fancy amortization schedule.
Amortization is the process of spreading a loan into a series of fixed payments over time.
Each payment in an amortized loan covers some interest and some principal. But this ratio shifts dramatically as the loan matures. Early payments are almost entirely interest (🤮), whereas later payments chip away more at the balance itself.
If you're looking to buy a home or refinance an existing mortgage, enter your loan details below to see your monthly payment and a complete month-by-month breakdown.
See your monthly payment, total interest, and full payment schedule for any fixed-rate loan.
On a $300,000 loan at 6.5% for 30 years, your monthly payment is $1,896.20.
When you take out a fixed-rate loan, your lender calculates a monthly payment that, if made consistently, will pay off both the interest and the principal by the end of the term.
The math behind it uses a standard formula:
M = P[r(1+r)^n] / [(1+r)^n - 1]
Where P is the principal, r is the monthly interest rate, and n is the total number of payments. (Aren't you glad you asked?! 😜)
In amortization, the payment composition changes over time. On a typical 30-year mortgage, you might spend the first decade paying more in interest than principal each month. It's only in the back half of the loan that the balance starts dropping noticeably.
In the calculator above, you can click the button below the graph to see the year-by-year breakdown of what this looks like.
One of the most powerful takeaways from an amortization schedule is seeing how extra payments accelerate payoff. Even small additional principal payments, like an extra $100 or $200 a month, can shave years off a mortgage and save tens of thousands in interest.
That's because your extra payment goes entirely toward principal, reducing the balance that future interest is calculated on.
A 15-year mortgage comes with a higher monthly payment, but a significantly lower total interest cost. Try running both scenarios through the calculator to see the difference.
For many borrowers, the 15-year option saves huge amounts in interest, but the higher payment can strain monthly cash flow. There's no universally right answer.
Whichever you choose, you have to make that payment each month. For that reason, some homeowners start on a 30-year mortgage to have more wiggle room.
30-year and 15-year fixed-rate mortgages are known as conventional mortgages. There are also adjustable-rate mortgages (ARMs), as well as government-backed loans, including VA loans, FHA loans, and USDA loans. ⬥
Learn more about Nick's debut book, which The New York Times called "A fun, well-written primer on a subject that's usually a snooze."
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