First-year amortization breakdown.
These calculators use standard financial formulas (amortization, compound interest, marginal tax brackets) to estimate results based on the numbers you enter. They don't account for your full financial picture, and results shouldn't be treated as financial, tax, or investment advice. For decisions with real money on the line, check the numbers with a lender, accountant, or financial advisor who can see your complete situation.
An amortization schedule breaks each monthly payment into how much went to interest vs principal, plus the remaining balance.
Early payments are heavily interest because interest accrues on the outstanding balance. As the balance drops, more goes to principal.
Looking at a full schedule is the clearest way to see why extra payments early in a loan save so much more interest than the same extra payment made near the end — early dollars are fighting a much larger balance.
$200,000 loan at 6% for 30 years: monthly payment $1,199.10. Year 1 interest $11,933.19, principal $2,456.02, ending balance $197,543.98.
Interest is calculated on the outstanding balance monthly. Balance is highest at the start, so interest eats most of the payment.
Every dollar of extra principal saves all future interest that dollar would have accrued — often several dollars over 30 years.
On a 30-year loan around 6%, that crossover happens roughly halfway through the term — often surprising people who expect it much sooner.