See a complete payment-by-payment breakdown of any loan.
| # | Payment | Principal | Interest | Balance |
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Amortization is the process of spreading a loan into a series of fixed payments over time. Each payment covers both interest on the remaining balance and a portion of the principal. Early in the loan, most of each payment goes to interest. Over time, a larger share goes to principal as the balance decreases.
On a $300,000 mortgage at 6.75% for 30 years, your monthly payment is $1,946. The first payment splits into $1,688 of interest and only $258 of principal. By payment 180 (halfway), the split is $1,083 interest and $863 principal. By the final payments, nearly 100% goes to principal. This front-loading of interest is why extra payments early in the loan save far more than extra payments later.