How to Read a Mortgage Amortization Schedule

An amortization schedule shows every payment you'll make over the life of your loan — broken down into exactly how much goes to principal and how much goes to interest. Understanding it can save you thousands.

What Is an Amortization Schedule?

When you take out a mortgage, your lender calculates a fixed monthly payment that will pay off the entire loan balance — principal plus interest — over the loan term. An amortization schedule is the table that shows, month by month, how that payment is split between paying down the loan balance (principal) and paying the lender for the use of their money (interest).

The total payment stays the same every month. What changes is the ratio: early on, most of your payment is interest. Over time, more and more goes to principal.

Why Are Early Payments Mostly Interest?

Interest on a mortgage is calculated monthly on your remaining loan balance. At the start of your loan, your balance is at its highest — so interest charges are at their highest. As you pay down the balance, each month's interest charge falls slightly, and more of your fixed payment is available to reduce the principal.

Example: $300,000 loan at 7% for 30 years

PaymentTotalInterestPrincipal

#1$1,996$1,750$246

#12$1,996$1,736$260

#60 (yr 5)$1,996$1,689$307

#180 (yr 15)$1,996$1,451$545

#300 (yr 25)$1,996$987$1,009

#360 (final)$1,996$12$1,984

Notice that in payment #1, only $246 of your $1,996 payment reduces your loan balance. By payment #300, more than half goes to principal. This is why paying off a mortgage early can save a dramatic amount of interest.

How to Read Each Column

Payment number / date

Which month you're looking at. Payment 1 is your first payment, payment 360 is your last on a 30-year loan.

Payment amount

Your fixed monthly payment (principal + interest only — does not include taxes or insurance unless shown separately).

Principal

The portion of this payment that reduces your loan balance. This grows each month as your balance falls.

Interest

The portion of this payment that goes to the lender. This shrinks each month as your balance falls.

Remaining balance

What you still owe after this payment. Track this to see when you'll hit 80% LTV (when you can remove PMI) or when you'll own your home free and clear.

Cumulative interest paid

Some schedules show how much total interest you've paid to date. This is the number that motivates extra payments.

How Extra Payments Save You Money

Because interest is calculated on your remaining balance, any extra principal payment you make reduces every future interest charge for the rest of the loan. Even a small additional monthly payment can save tens of thousands of dollars over a 30-year mortgage.

$300,000 at 7% — impact of extra principal payments:

Extra/monthPaid offInterest saved

$0 (baseline)30 years—

$100~26 years~$38,000

$250~23 years~$72,000

$500~20 years~$113,000

When making extra payments, specify to your servicer that the additional amount should be applied to principal only — not toward next month's payment. Otherwise some servicers will apply it as a pre-payment of your next scheduled payment, which doesn't reduce future interest the same way.

Using the Schedule to Track LTV and Remove PMI

If you made a down payment of less than 20%, you're paying PMI. Your amortization schedule tells you exactly when your remaining balance will reach 80% of the original appraised value — the threshold for requesting PMI cancellation.

For example, on a $300,000 home with 10% down ($270,000 loan), you need your balance to reach $240,000 (80% of $300,000). Scan your amortization schedule's "remaining balance" column to find exactly which payment gets you there.

Pro tip: Once you know the payment number, count forward from today to estimate the calendar date — then mark it and contact your servicer at that point to initiate PMI removal.

See Your Full Amortization Schedule

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Disclaimer: The examples above are illustrative estimates. Actual savings from extra payments depend on your specific loan terms and servicer policies. This content is for educational purposes only and does not constitute financial advice.