Amortization Calculator

How the maths works

The payment is level, and what it buys is not. Each month the lender charges interest on whatever is still owed, and whatever is left of the payment goes to the balance:

interest this month = balance × annual rate ÷ 12

principal this month = payment − interest this month

At the start the balance is at its largest, so the interest charge is at its largest and very little is left over. As the balance falls the interest charge falls with it, and the principal portion grows to fill the space. Nothing is being withheld. The arithmetic simply front-loads the interest, and it does so more sharply the longer the term.

The crossover month

There is a specific month in which more of your payment goes to the balance than to the lender for the first time. It happens when the balance falls to the payment divided by twice the monthly rate, and on a thirty-year loan it usually lands roughly two thirds of the way through the term.

Almost nobody expects that. It is the clearest single answer to why a mortgage feels like it is not moving for years, and it is why the first years are the ones where an extra payment does the most work.

What the term does

The table below is the most useful thing on this page. Cutting a thirty-year loan to fifteen typically removes more than half the total interest, because the balance falls much faster and there is far less of it accruing for far less time. The payment rises, but nothing like in proportion.

That trade is not automatically correct. A longer term with the difference invested, or simply held as reserves, is a defensible choice. What is not defensible is choosing a term without having seen this table.

Where this differs from your statement

• Rounding. Servicers round to the cent each month and this does not, so the pennies drift.
• Payment dates. Interest accrues by the day on some loans and by the month on others.
• Escrow. Your real payment includes taxes and insurance, which are collected alongside the loan and are not part of the schedule at all.

Use this to understand the structure. Use your statement for the balance.

What the term does to the total interest

Frequently asked questions

Why is so little of my early payment going to the balance?

Because interest is charged on what is still owed, and at the start that is almost everything. The payment is level, so the interest share starts high and the principal share fills the gap it leaves as the balance falls. Nothing is being withheld; the arithmetic simply front-loads the interest.

What is the crossover month?

It is the first month in which more of your payment goes to the balance than to interest. On a thirty-year loan at a normal rate it lands roughly two thirds of the way through the term, which surprises almost everybody who has not seen a schedule.

Does a shorter term really cost that much less?

Yes, and the table shows it. Halving the term from thirty years to fifteen typically cuts the total interest by more than half, because the balance falls much faster and there is less of it accruing for much less time. The payment rises, but by nothing like the same proportion.

Is this the same schedule my servicer uses?

The arithmetic is standard, so the shape matches. The pennies will not: servicers round each month and some apply payments on different dates. Use this to understand the structure, and your statement for the exact balance.

Sources

• Freddie Mac Primary Mortgage Market Survey, national weekly average mortgage rates, retrieved 2026-08-24