Interest comes first
Each month’s interest equals the monthly rate multiplied by the unpaid balance at the start of that month.
1. Set the loan assumptions
Change any input and the entire amortization schedule updates immediately.
Monthly P&I payment
—
Constant scheduled payment
Total of payments
—
Principal + interest
Total interest
—
Cost of borrowing over the term
Interest / original loan
—
A term-sensitive cost measure
Principal share in Year 1
Principal share in final year
Principal becomes the majority
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2. Watch the payment composition change
Each stacked bar is one loan year. Select a bar or move the year slider.
Tip: compare the orange area near the beginning and end of the loan.
BeginningEnd
Beginning balance—
Payments during year—
Principal paid—
Interest paid—
Ending balance—
Balance repaid—
3. Why the shares change
The mechanism follows directly from how interest is calculated.
Principal is the remainder
After interest is covered, the rest of the fixed payment reduces the loan balance.
The process accelerates
A smaller balance produces less interest next month, leaving more of the same payment for principal.
Payment = P × r(1 + r)n ÷ [(1 + r)n − 1]
Here, P is the original principal, r is the monthly interest rate, and n is the number of monthly payments. At a zero interest rate, payment equals P ÷ n.
4. Annual amortization schedule
Monthly calculations are aggregated into loan years for a clearer comparison.
| Year | Beginning balance | Total payment | Principal | Interest | Principal share | Ending balance |
|---|
Small differences may occur because displayed amounts are rounded to cents.