Amortisation Schedule Calculator

An amortisation schedule is the payment-by-payment breakdown of a loan, showing how each payment splits between interest and principal and how the remaining balance shrinks over time. The defining characteristic of standard amortisation is that the early years are mostly interest, and the later years are mostly principal — even though the monthly payment stays constant. This calculator surfaces the year-1 figures (the interest-heavy end of the schedule) plus the lifetime totals.

How to use it

Enter the loan amount (the principal borrowed), the annual interest rate, and the term in years. The calculator returns the monthly payment, the interest paid in year 1, the principal paid in year 1, the balance at the end of year 1, the total interest paid over the full term, and the total amount paid over the full term.

What the inputs mean

Loan amount is the principal — the amount actually borrowed, not the property price. Annual rate is the headline rate quoted by the lender, entered as a percentage (5 for 5%, not 0.05). Term is the loan length in years. The calculator assumes a fixed rate, fixed monthly payment, and no overpayments or missed payments — which matches the contractual structure of most fixed-rate mortgages, personal loans, and car loans.

The front-loaded interest pattern

Each month's interest equals the remaining balance multiplied by the monthly rate. At the start of the loan the balance is at its maximum, so the interest portion of the payment is also at its maximum. As the balance falls, the interest portion shrinks — and because the total payment is constant, the principal portion grows. This is why a 25-year mortgage typically has its principal-vs-interest crossover (the first month where principal exceeds interest) somewhere around year 11-13 at typical residential rates, not at the midpoint of the loan.

A worked example

Numbers below are illustrative units — the calculator displays them in your selected currency. With a loan amount of 200,000, an annual rate of 5%, and a 25-year term, the monthly payment is about 1,169.18. Year 1 interest is about 9,906.35; year 1 principal is about 4,123.81; the balance at the end of year 1 is about 195,876.19. Over the full 25 years the total interest is about 150,754, and the total amount paid is about 350,754. Adjust any input and the figures update in real time.

Why early overpayments save more interest

Because early payments are mostly interest, an overpayment made early in the loan reduces principal that would otherwise have been compounding against future months of interest. The same monetary overpayment made late in the loan reduces principal that would only have generated a small amount of remaining interest. The lifetime interest saving from an early overpayment can be many times larger than the same overpayment made years later — the exact ratio depends on rate, term, and timing. The schedule itself is what makes that asymmetry visible.

Standard amortisation vs interest-only

This calculator models standard amortisation, where the principal reduces each month. Interest-only loans pay only the interest each month with the full principal due at the end of the term. Buy-to-let mortgages are often interest-only; residential mortgages are almost always amortising. An interest-only loan has a lower monthly payment for the same principal and rate, but the borrower still owes the full original principal at the end of the term — and needs a separate plan to repay it (sale of asset, savings, investments).

What this tool does not capture

The calculator assumes a fixed rate, fixed payment, no overpayments, no missed payments, no rate resets, and no fees. It also does not separately model rate-fix periods (common on mortgages, where the headline rate applies for an initial period and then changes). For rate-fix modelling, run the calculation at the initial rate to see year-1 figures, and re-run at the post-fix rate to see what changes. The tool does not model offset accounts, redraw facilities, sinking funds, escrow, or jurisdiction-specific tax treatment of mortgage interest.