How mortgage amortization works, with worked examples
Learn how mortgage amortization works: the annuity formula, why early payments are mostly interest, and how term, rate and overpayments change the cost.
Mortgages & financing8 min read
Mortgage Repayment Calculator
See what a mortgage really costs: the monthly payment, the total interest over the term and how the balance falls each year. Add an extra monthly repayment to see how much interest and time it could save.
Results
- Monthly payment
- €1,319.59
- Total interest
- €145,878
- Total paid
- €395,878
- Paid off after
- 25 years 0 months
Amortization schedule (by year)
| Year | Payments | Interest | Principal | Balance |
|---|---|---|---|---|
| 1 | €15,835 | €9,892 | €5,943 | €244,057 |
| 2 | €15,835 | €9,650 | €6,185 | €237,871 |
| 3 | €15,835 | €9,398 | €6,437 | €231,434 |
| 4 | €15,835 | €9,135 | €6,700 | €224,734 |
| 5 | €15,835 | €8,862 | €6,973 | €217,762 |
| 6 | €15,835 | €8,578 | €7,257 | €210,505 |
| 7 | €15,835 | €8,283 | €7,552 | €202,952 |
| 8 | €15,835 | €7,975 | €7,860 | €195,092 |
| 9 | €15,835 | €7,655 | €8,180 | €186,912 |
| 10 | €15,835 | €7,322 | €8,514 | €178,398 |
| 11 | €15,835 | €6,975 | €8,860 | €169,538 |
| 12 | €15,835 | €6,614 | €9,221 | €160,317 |
| 13 | €15,835 | €6,238 | €9,597 | €150,720 |
| 14 | €15,835 | €5,847 | €9,988 | €140,731 |
| 15 | €15,835 | €5,440 | €10,395 | €130,336 |
| 16 | €15,835 | €5,017 | €10,819 | €119,518 |
| 17 | €15,835 | €4,576 | €11,259 | €108,258 |
| 18 | €15,835 | €4,117 | €11,718 | €96,540 |
| 19 | €15,835 | €3,640 | €12,195 | €84,345 |
| 20 | €15,835 | €3,143 | €12,692 | €71,653 |
| 21 | €15,835 | €2,626 | €13,209 | €58,443 |
| 22 | €15,835 | €2,088 | €13,748 | €44,696 |
| 23 | €15,835 | €1,527 | €14,308 | €30,388 |
| 24 | €15,835 | €944 | €14,891 | €15,497 |
| 25 | €15,835 | €338 | €15,497 | €0 |
Assumes a fixed rate for the whole term and monthly compounding. Real offers may differ (fees, rate resets, other compounding conventions).
Runs entirely in your browser. No data is sent to a server.
How it works
- Enter the loan amount, the yearly interest rate and the term in years.
- Choose repayment (annuity) or interest-only.
- Optionally add an extra amount you would pay each month.
- Read the monthly payment and total interest, then scroll through the yearly amortization schedule.
FAQ
How is the monthly mortgage payment calculated?
For a repayment (annuity) loan the payment is P × r ÷ (1 − (1 + r)^−n), where P is the loan, r the monthly rate and n the number of months. The payment stays the same while the interest share falls and the principal share rises.
What is an amortization schedule?
It is a table showing, for each period, how much of your payments went to interest, how much reduced the loan and what balance remains. This calculator groups it by year.
What happens with an interest-only mortgage?
You only pay interest each month, so the balance does not fall. The full loan is still owed at the end of the term and must be repaid from savings, a sale or refinancing.
Do overpayments always save money?
Paying extra reduces the balance earlier, so less interest accrues. Some lenders limit overpayments or charge fees, so check your loan terms first.
Why might my lender's figure differ slightly?
Lenders may add fees, use a different compounding convention or round differently. The calculator assumes a fixed rate and monthly compounding for the whole term.
Related articles
Interest only vs repayment mortgage: which fits you?
Interest only vs repayment mortgage compared with worked numbers: monthly cost, total interest, end-of-term debt, risks and when each one makes sense.
Mortgages & financing7 min read
Loan to value ratio explained: formula and examples
Loan to value ratio explained: how to calculate LTV, why lenders care, how it changes over time and how to lower it before you buy or refinance a property.
Mortgages & financing7 min read
Rental property cash flow: how to calculate it
Calculate rental property cash flow step by step: rent, vacancy, operating costs and mortgage payments, with a worked example and a stress test you can copy.
Buy-to-let investing8 min read
More tools
Rental Yield Calculator
Calculate gross and net rental yield, cap rate, cash-on-cash return and monthly cash flow for a buy-to-let property. Free, instant, no sign-up.
- Steps
- 4
- Questions answered
- 5
- Related guides
- 5
Service Charge Allocation Calculator
Split service charges and shared utility costs between flats by floor area, equal shares, occupants or ownership shares. See each unit's balance instantly.
- Steps
- 4
- Questions answered
- 5
- Related guides
- 4
Rent Increase Calculator
Calculate a new rent from a percentage or an index (CPI) change, apply a cap or trigger threshold and see the increase per month and per year. Free tool.
- Steps
- 4
- Questions answered
- 4
- Related guides
- 3