What Is an Amortization Schedule, and How Do I Read It?
- By Jim Blackburn
- on
- 100 first time home buyer FAQs
1. An Amortization Schedule Breaks Down Every Payment
Your amortization schedule is like a detailed receipt for your entire loan. It shows:
- How much of each payment goes toward interest
- How much goes toward paying down the principal
- Your remaining loan balance after each payment
It covers every single month, from your first payment to your last—and it helps you visualize how your loan is structured over time.
Want to see your own amortization breakdown? Calculate your Conventional Purchase Loan Payment now to view how much of each payment goes toward principal versus interest over the life of your loan.
2. In the Beginning, You Pay More Interest Than Principal
Most people don’t realize this: in the first few years of your mortgage, the majority of your payment goes toward interest.
Over time, as your principal balance gets smaller, more of your payment goes toward actually owning the home.
For example:
- On a $300,000 loan at 6%, your first payment might put ~$1,500 toward interest and only ~$300 toward principal.
- But halfway through the loan, that ratio flips.
This is why early extra payments can make a huge impact.
Understanding this interest-heavy structure is crucial when comparing loan options. Calculate your Compare 2 Rates (Interest Costs) now to see how different interest rates affect your total interest paid and your amortization schedule over time.
3. Use the Schedule to Spot Savings Opportunities
Here’s the secret sauce: you can use your amortization schedule to:
See the impact of making extra payments toward the principal Plan how to pay off your loan faster Understand how much interest you’ll save by accelerating your payoffEven just one extra payment per year can shave years off your mortgage—and save you tens of thousands of dollars in interest.
If you’re currently paying high interest on your existing mortgage, refinancing could dramatically improve your amortization schedule. Calculate your Conventional Refinance Rate Reduction Loan Payment now to see how a lower rate shifts more of each payment toward principal and reduces total interest costs.
Planning to pay off your mortgage faster? Explore our Refinance or HELOC page to understand different strategies for accelerating your payoff and building equity faster.
Want to See How Your Mortgage Really Works—and How to Beat It?
At Stairway Mortgage, we don’t just get you the loan—we help you master it.
📘 Download our homebuyer guides about mortgage payoff strategies.
📊 Check Current Rates to see refinance options.
🧮 Compare scenarios with our Compare 2 Rates Calculator.
🏠 Explore payoff strategies on our Refinance or HELOC page.
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