Finance guide
Amortization: How Loan Payments Split Into Interest and Principal
Understand why early payments are mostly interest, how extra payments attack principal, and what an amortization schedule really tells you.
Written by James — Founder & Builder, BoringToolsKit · Published 2026 · Planning information, not professional advice.
The payment is fixed; the split is not
A fixed-rate loan keeps the same payment, but each payment splits differently: early on, most goes to interest; near the end, most goes to principal. A $300,000 mortgage at 6.5 percent over 30 years has a payment of about $1,896 — the first payment is roughly $1,625 interest and only $271 principal.
Why the front-load happens
Interest is charged on the remaining balance, which is largest at the start. As the balance falls, the interest share falls and the principal share grows. The schedule is the map of that shift, and the total interest line — about $382,000 on that 30-year loan — is the real cost of the term.
Extra payments are turbocharged early
Because early principal is tiny, an extra $100 in month one saves all the future interest on that $100 — about $260 over a 6.5 percent 30-year loan. Extra payments made in the first half of the loan have the most leverage; the same $100 in year 25 saves far less. The calculator shows the term and interest impact of a recurring extra payment.
Shorter terms flip the math
A 15-year mortgage at the same rate has a higher payment — about $2,614 on $300,000 — but total interest drops to roughly $170,000. The difference of more than $200,000 in interest is the price of the 15 extra years. Comparing total interest, not just the payment, is the only honest way to choose.
Use the schedule to decide
Run the amortization table for any loan scenario: mortgage, auto, or personal. Look at the total interest, the payoff date, and what a modest extra payment does. The schedule makes 'I'll pay it off early someday' into a specific number you can act on.