Amortization Schedule Calculator
The monthly payment, and a year-by-year table of interest, principal and balance.
Year-by-year schedule
| Year | Interest | Principal | Balance |
|---|
How this is calculated
M = P·r(1+r)ⁿ ÷ ((1+r)ⁿ − 1); each month: interest = balance × r, principal = M − interest
Worked example: $200,000 at 6% over 30 years → about $1,199/month. In year one roughly $11,900 is interest and only $2,500 principal; by the final year almost all of it is principal. The table above shows the full crossover.
Reading the schedule
Each row splits one payment into interest and capital. Interest is that month's rate applied to the outstanding balance; everything left over reduces the balance. Because the balance falls, the interest portion falls and the capital portion rises, month after month, with the total payment staying identical. That is the whole mechanism, and seeing it laid out changes how most people think about their loan.
The row worth finding is the crossover — the first month where capital exceeds interest. On a twenty-year bond at typical rates it arrives somewhere past the halfway mark, which surprises people who assume they own half the house after ten years of payments.
Why the early years feel like nothing is happening
On a R1,500,000 bond at 11% over twenty years, the first payment is roughly R13,750 of which about R13,750 × 0.83 is interest. After five years of payments — around R825,000 handed over — the balance has fallen by roughly R170,000. This is not a fee or a trick; it is what charging interest on a declining balance produces when the balance starts high and the term is long.
It is also the single strongest argument for overpaying early. Capital removed in year one avoids interest for nineteen further years, which is why the schedule reacts so violently to small extra payments at the start.
Using the schedule in practice
Three uses justify printing it. First, checking your lender: the balance on your annual statement should match the schedule row for that month, and a discrepancy is worth a phone call. Second, planning a sale or settlement — the schedule tells you what you will still owe on a given date, which determines what you walk away with. Third, tax, where interest paid is deductible: the schedule separates interest from capital for each year, which is precisely what a return needs.
Where the schedule stops being accurate
Any assumption change invalidates the rows after it. A variable rate makes every subsequent row hypothetical, which for most South African home loans means the schedule is a snapshot at today's prime rather than a forecast. Extra payments reshape everything after them. Payment holidays, capitalised arrears and restructures all restart the arithmetic. Regenerate the schedule after any of these rather than reading on from the old one.
Frequently asked questions
What does an amortization schedule show?
It breaks each year of a loan into how much went to interest versus principal, and the balance left at year end. Early on, most of your payment is interest; over time the split flips and principal falls faster. Seeing the table is the clearest way to understand why the first years feel like standing still.
Why is so much early payment interest?
Because interest is charged on the outstanding balance, which is largest at the start. The level payment stays the same, but as the balance shrinks the interest portion shrinks with it, so more of each payment attacks the principal. That crossover is exactly what the schedule makes visible.
How do extra payments change this?
Any extra goes straight at the principal, pulling every future interest charge down and shortening the schedule. Even small regular overpayments early — when the balance is biggest — save a surprising amount over the life of the loan.