Mortgage amortisation schedule

Why the early years barely move the balance

Interest is charged on what you still owe, so at the start, when you owe almost everything, almost the whole payment is interest. On a typical thirty-year loan the first payment is around 83% interest and about 17% house.

The bars above show it directly: the interest block dominates for years, then slowly gives way. The point where the two halves cross is much later than most people assume, and it is the single most useful thing on this page.

Why paying extra early is worth so much more

An extra dollar paid in year one removes a dollar of debt that would otherwise have accrued interest for the remaining twenty-nine years. The same dollar in year twenty-five removes almost nothing, because there is barely any time left for it to compound against you.

Put a number in the extra field and watch two things: the total interest, and how far left the balance line reaches zero. Small amounts move both surprisingly far.

The halfway trap

Halfway through the term you have not paid off half the loan. On standard numbers you still owe well over half, because the principal only starts falling meaningfully in the second half. People remortgage at this point believing they are further along than they are.

How this is calculated

Standard amortisation, computed month by month and grouped into years. Interest each month is the outstanding balance times the monthly rate; the remainder reduces the balance. Fees, insurance and rate changes are not modelled.

What this does not include

Rates change and most loans are not fixed for their whole life, so a thirty-year schedule at one rate is a model, not a forecast. Fees, insurance, rates and maintenance are all excluded, and it assumes every payment is made on time.