Mortgage Amortization Calculator
Calculate mortgage amortization schedule and see payment breakdown over time.
Calculate Amortization
Loan Summary
Yearly Amortization Schedule
| Year | Beginning Balance | Total Payment | Principal | Interest | Ending Balance |
|---|---|---|---|---|---|
| Enter details and click Calculate | |||||
Understanding amortization
Amortization is the process of paying off a loan through regular payments. Each payment includes both principal and interest, with the proportion changing over time.
• Early payments: Mostly interest, little principal
• Later payments: Mostly principal, little interest
• EMI remains constant throughout
Key insights:
• In first year of a 20-year mortgage at 12%, ~98% of payment goes to interest
• By year 10, it's about 50-50 split
• By year 20, ~98% goes to principal
• This is why extra principal payments early save massive interest
FAQs
Why does interest decrease over time?
Interest is calculated on remaining balance. As you pay down principal, there's less balance to charge interest on.
Should I make extra principal payments?
Yes! Extra payments early in the loan save massive interest and shorten loan term significantly.
What if I pay extra every month?
Even NPR 5,000 extra per month on a 50 lakh loan can save 5+ years and lakhs in interest.
Can I refinance to lower rates?
Yes, if rates drop significantly (2%+). But factor in refinancing costs and remaining loan term.
What's better: shorter term or lower rate?
Lower rate is usually better. But if rates are similar, shorter term saves total interest (but higher monthly payment).