Understanding Mortgage Amortization
Your mortgage payment stays the same each month, but what's inside that payment changes dramatically over time.
What is Amortization?
Amortization is the process of paying off a loan through regular payments over time. Each payment includes both principal and interest, with the split changing each month.
How It Works
On a $300,000 loan at 6.5% for 30 years:
- Monthly payment: $1,896
- Month 1: $1,625 interest + $271 principal
- Year 15: $1,100 interest + $796 principal
- Year 30: $10 interest + $1,886 principal
Why It Matters
- Equity building: Most of your payment goes to interest early on
- Refinancing: Refinancing resets the clock
- Extra payments: Early extra payments have biggest impact
View Your Schedule
Use our mortgage calculator to see your complete amortization schedule with month-by-month breakdowns.