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.
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.
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.
Want to See How Your Mortgage Really Works—and How to Beat It?
Download our free “Smarter Mortgage Strategy” eBook — includes a sample amortization schedule and extra payment calculator
Chat live now to ask about early payoff strategies or interest savings
Schedule a call with a Stairway Mortgage advisor to break down your current or future loan and find the hidden savings
At Stairway Mortgage, we don’t just get you the loan—
we help you master it.
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