Reading the table like a lender
Look at the first row: on the default 30-year scenario, year one retires about 1.1% of the loan while consuming a full year of payments. Now find the crossover year — where the principal column overtakes interest. On the default inputs it arrives in year 20. Before that point, each annual row sends more to interest than principal; after it, more reduces the balance. The mortgage payoff calculator shows how an extra-payment scenario changes that schedule. A refinance creates a new schedule, so compare its fees, rate, payment, and new term in the refinance calculator.
Two other landmarks worth finding in a mortgage schedule are the balance at a realistic selling horizon and the scheduled balance used when checking mortgage-insurance rules. The calculator does not know the property’s original value, the loan’s coverage, or the servicer’s requirements, so it cannot determine a PMI cancellation date by itself.
For the national picture — the payment on a median-priced home at today’s rate, by price, rate, and down payment — see our average mortgage payment page, computed against current Freddie Mac and NAR data.
Method, example, and sources
How this calculator works
The model converts the annual rate to a monthly rate and calculates the level principal-and-interest payment that reduces the balance to zero over the selected term. Each month, interest is the current balance multiplied by that monthly rate; the rest of the payment reduces principal. Monthly results are then grouped into annual rows.
Worked example
For the default $300,000 loan at 6.5% over 30 years, the model produces a $1,896.20 monthly principal-and-interest payment and about $382,633 of total interest. In year one, about $19,401 goes to interest and $3,353 to principal; annual principal first exceeds annual interest in year 20.
What the estimate leaves out
- The rate and scheduled payment stay fixed; adjustable-rate, interest-only, balloon, and negatively amortizing loans require a different model.
- Taxes, insurance, mortgage insurance, fees, late payments, extra payments, and servicer-specific allocation or rounding are excluded.
- The loan amount alone does not establish property value, home equity, or eligibility for mortgage-insurance cancellation.
Primary sources
Frequently asked questions
What is an amortization schedule?
A table showing how each payment on a fixed, fully amortizing loan splits between interest and principal, and what balance remains. On many long-term loans, early payments allocate more to interest and later payments more to principal; the exact split depends on the rate and term.
Why is so much of my early payment interest?
Interest is charged on the current balance, and the balance is biggest at the start. On a 30-year loan at 6.5%, roughly 86% of the first payment is interest. As the balance shrinks, the same payment covers less interest and retires more principal — the curve accelerates all by itself.
When will I reach 20% equity (and drop PMI)?
This calculator knows the loan balance, not the property value or mortgage-insurance rules for a specific loan. For many covered mortgages, federal rules generally require automatic PMI termination on the scheduled date when the balance reaches 78% of the home’s original value, provided payments are current. Borrower-requested cancellation and investor rules can differ, so verify the loan and servicer requirements.
Does this work for car loans and personal loans too?
Yes — any fixed-rate, fully amortizing loan follows the same math. Enter the amount, rate, and term. It does not model interest-only periods, ARMs after their fixed window, or credit card revolving balances.
How do extra payments change the schedule?
When a lender applies an extra amount to principal, it can reduce later interest and shorten payoff. Allocation rules, fees, and prepayment terms can change the result, so confirm them with the lender. This page shows the baseline schedule; model a simplified extra-payment scenario in the mortgage payoff calculator.