Mortgages & MoneyLive

Amortization Schedule

See how each monthly payment splits between interest and principal across the life of your loan.

Short answer

In the early years, most of your payment is interest. As the balance shrinks, more of each payment goes to principal. Total interest paid over the life of the loan can rival the original capital.

Loan

Loan amount

Interest rate (annual)

Term (years)

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How it works

Monthly payment M = P × r / (1 − (1+r)⁻ⁿ), where r is the monthly rate and n the months. Each month's interest = current balance × r; principal = M − interest.

Worked example

£200k at 4.5% over 25y = £1,111/mo. Total paid £333,460 (£133,460 interest).

Who should use this

•First-time buyers
•Anyone comparing mortgage terms
•Loan refinancing decisions

Common mistakes

×Assuming a level interest split — early years are heavily interest-loaded
×Forgetting arrangement and broker fees

Frequently asked questions

Why is so much interest paid in the first years?▾

Interest is charged on the outstanding balance — it's biggest when the loan is biggest.

Related calculators

Mortgage Repayment →Mortgage Affordability →Compound Interest →