Where every payment goes.
A stacked-area view of how each monthly payment is split between principal and interest over the life of a loan, and the year the split finally tips.
Illustrative. The amortization formula is exact, but actual loans add property tax, insurance, PMI, and any escrow shortages on top of P&I. More on this →
For the first 20 years of this 30-year loan, more of every payment goes to interest than to equity.
Stacked composition of every monthly payment over the life of the loan. The crossover, the year your principal payment first exceeds your interest payment, doesn’t happen until well into the schedule at typical rates.
Source · Standard amortization formula applied to the inputs above.
The amortization schedule applies the standard formula P × r(1+r)^n / ((1+r)^n − 1) for the monthly principal & interest payment, then walks the loan month by month: interest each month equals the beginning balance times the monthly rate, and principal equals the (constant) payment minus that interest. The remaining balance reaches zero after 360 payments.
With an extra monthly payment, every dollar above the scheduled P&I goes directly to principal, accelerating the payoff and reducing the total interest paid. The schedule terminates when the remaining balance hits zero, which can happen many months earlier than the original term.
The result is illustrative. Actual loan amortization can differ if the rate adjusts (see ARM mode above), if extra payments are not applied immediately by the servicer, or if mid-loan recasting changes the payment schedule.
Loan products modeled: conforming fixed-rate, 5/1 / 7/1 / 10/1 ARMs, interest-only, FHA fixed, and VA fixed. A licensed mortgage professional can model loan products that are not represented here.