What is an amortization schedule?
An amortization schedule is the row-by-row record of a level-payment loan. Every row shows the payment, the interest charged on the balance that month, the principal repaid, the interest paid so far and the balance left. The payment never changes, but what it buys does: early rows are mostly interest and late rows are mostly principal.
Here is part of the schedule for the default loan, $250,000 at 6% over 30 years with a monthly payment of $1,498.88:
| Payment | Interest | Principal | Balance after |
|---|---|---|---|
| 1 | $1,250.00 | $248.88 | $249,751.12 |
| 2 | $1,248.76 | $250.12 | $249,501.00 |
| 3 | $1,247.51 | $251.37 | $249,249.63 |
| 222 | $749.53 | $749.35 | $149,156.43 |
| 223 | $745.78 | $753.09 | $148,403.34 |
| 360 | $7.46 | $1,491.42 | $0.00 |
Payment 223 is the crossover: the first row where principal is larger than interest. The calculator above reports it as the headline, then lists the full schedule underneath, by year or by payment.
How do you calculate an amortization schedule by hand?
Each row comes from the row before it, in three steps:
- Interest = balance at the start of the month x monthly rate. For the first row, $250,000 x 0.5% = $1,250.00.
- Principal = payment minus interest: $1,498.88 - $1,250.00 = $248.88.
- New balance = old balance minus principal: $250,000 - $248.88 = $249,751.12.
Repeat with the new balance and the second row charges $1,248.76 of interest, $1.24 less, because the balance fell by $248.88 and 0.5% of $248.88 is $1.24. That same $1.24 moves to principal, so principal grows by a factor of (1 + i) each month. The level payment itself comes from the annuity formula, payment = L x i x (1 + i)^n / ((1 + i)^n - 1). In it, L is the amount borrowed, i the rate per month and n the count of monthly payments.
Because principal grows by (1 + i) a month, the crossover month can be found without building the table: it is the first whole number above 1 + ln(payment / (2 x (payment - L x i))) / ln(1 + i). For the default loan that is 1 + ln(1,498.88 / 497.75) / ln(1.005) = 222.02, so the crossover is payment 223. The last payment is trimmed to whatever balance is left, which is why the final row can differ from the others by a cent.
When does principal overtake interest?
The crossover month depends on the rate and the term, not on the size of the loan. On a 30-year loan of any amount, a higher rate pushes it later, because each month's interest takes a bigger bite of the payment:
| Rate, 30 years | Payment on $250,000 | Total interest | Crossover payment |
|---|---|---|---|
| 3% | $1,054.01 | $129,444 | 84 |
| 4% | $1,193.54 | $179,674 | 153 |
| 5% | $1,342.05 | $233,139 | 195 |
| 6% | $1,498.88 | $289,595 | 223 |
| 7% | $1,663.26 | $348,772 | 242 |
| 8% | $1,834.41 | $410,388 | 257 |
A shorter term moves the crossover earlier. At 6%, it falls at payment 43 of a 15-year loan, 103 of a 20-year loan, 163 of a 25-year loan, 223 of a 30-year loan and 283 of a 35-year loan. On a 10-year loan at 6% even the first payment is mostly principal. The balance chart above marks the crossover with a dashed line, and the yearly chart shows the two lines crossing.
Why is half the term not half the loan?
On the default loan, month 180 is the halfway point in time, yet only $72,377.89 of the $250,000 has been repaid by then, about 29%. The balance does not reach half the loan until payment 252, in year 21. A quarter of the loan is gone by payment 164 (year 14) and three quarters by payment 314 (year 27). The Repayment milestones panel next to the chart reports these months for your inputs.
The interest bill is front-loaded in the same way. Of the $289,595 of total interest, $232,653 is paid by the crossover month, and the first payment alone is 83.4% interest. Across the whole loan, interest makes up 53.7% of everything paid. These shares matter if you expect to sell, move or replace the loan early: after 5 years the balance is still $232,635.89, and after 10 years $209,214.31.
Worked examples in dollars, pounds and dirhams
Each example is worked in its own currency with its own numbers; no amount is converted. The rates are illustrations, not quotes.
| Loan | Rate and term | Monthly payment | Total interest | Crossover | Half repaid |
|---|---|---|---|---|---|
| $250,000 | 6%, 30 years | $1,498.88 | $289,595 | Payment 223 | Payment 252 |
| $250,000 | 6%, 15 years | $2,109.64 | $129,736 | Payment 43 | Payment 110 |
| £200,000 | 4.75%, 25 years | £1,140.23 | £142,070 | Payment 126 | Payment 193 |
| AED 1,200,000 | 5%, 25 years | AED 7,015.08 | AED 904,524 | Payment 135 | Payment 195 |
In the pound example, the first payment is £791.67 of interest and £348.57 of principal, and the balance after the first year is £195,724.91. In the dirham example, total interest is about three quarters of the amount borrowed. Choose a currency above the calculator and the symbols and decimal places follow it.
Does the way the rate compounds change the schedule?
Yes, a little. The same quoted rate gives a different monthly rate depending on its convention, and the calculator offers three under Rate convention:
| Quoted 6% treated as | Monthly rate | Payment on $250,000, 30 years | Total interest | Crossover |
|---|---|---|---|---|
| Compounding monthly (6% / 12) | 0.500000% | $1,498.88 | $289,595 | 223 |
| Compounding half-yearly | 0.493862% | $1,487.06 | $285,341 | 221 |
| Effective annual rate | 0.486755% | $1,473.43 | $280,433 | 219 |
Half-yearly compounding uses (1 + r / 2)^(1/6) - 1 as the monthly rate, and an effective annual rate uses (1 + r)^(1/12) - 1. In Canada, section 6 of the federal Interest Act says that where a mortgage is repaid in blended payments of principal and interest, no interest is recoverable unless the mortgage contains a statement of the principal and of the rate calculated yearly or half-yearly, not in advance (Justice Laws website, consolidation current to 2026-10-19). The section is about how the rate is stated; the half-yearly option here shows what a rate stated that way means month by month. Dividing the rate by 12 is the plain monthly convention used in this calculator by default. Your loan agreement sets the convention, so check its wording. In the US the table is usually called an amortization schedule; in the UK the same loan is a repayment, or capital and interest, mortgage.
How do you make an amortization schedule in Excel?
Excel has a function for each column. Microsoft's documentation gives IPMT(rate, per, nper, pv, [fv], [type]) for the interest in period per, and PPMT(rate, per, nper, pv, [fv], [type]) for the principal, with per running from 1 to nper. Both pages say to keep the units consistent, so a monthly schedule uses the annual rate divided by 12 and the years multiplied by 12.
- Put the payment numbers 1 to 360 in column A.
- Interest: =IPMT(6%/12, A2, 360, -250000) returns 1,250.00 for row 1.
- Principal: =PPMT(6%/12, A2, 360, -250000) returns 248.88.
- Balance: the previous balance minus the principal column, starting from 250,000.
In Microsoft's sign convention, cash you pay out is a negative number. Entering the loan as -250000 flips the signs, so the interest and principal come out as positive figures. In row 223, IPMT returns 745.78 and PPMT returns 753.09, the crossover. To use half-yearly compounding in a sheet, replace 6%/12 with (1+6%/2)^(1/6)-1. The calculator gives the same rows without a sheet and lets you switch between yearly and monthly views.
Can I amortize a car loan or personal loan here?
Yes. The schedule works for any loan with a fixed rate and equal monthly payments, whatever it is secured on. A $30,000 car loan at 7% over 5 years has a payment of $594.04, and the first payment is already $419.04 of principal against $175.00 of interest, so the crossover is payment 1. Total interest is $5,642, and half the loan is repaid by payment 33.
Short terms amortize fast because each payment has to retire a large slice of the loan. The longer the term, the longer interest dominates. The calculator does not handle loans whose rate changes, loans with a balloon payment at the end, or interest-only periods, since those do not follow a single level-payment schedule.
Common mistakes and what this calculator leaves out
- Reading the payment as the cost. The schedule shows where the payment goes; total interest is the cost of borrowing.
- Assuming equity builds evenly. Half the term repays well under half the loan on most mortgages, as the milestones show.
- Mixing conventions. A rate stated half-yearly and divided by 12 overstates the monthly rate slightly. At 6% on $250,000 the gap is $11.82 a month and $4,254 over 30 years.
- Rounding the rate. Keep the full monthly rate; rounding it moves every row.
The calculator assumes payments at the end of each month, no missed or extra payments and one rate for the whole term. Lenders may round each payment to the cent and adjust the final one, so a real statement can differ by small amounts. It does not include fees, insurance, taxes or escrow, and it does not show the effect of paying extra; the mortgage overpayment calculator does that.
Glossary
Amortization: repaying a loan through equal payments that cover interest and part of the principal. Amortization schedule: the table of every payment's interest, principal and remaining balance. Crossover: the first payment whose principal part exceeds its interest part. Level payment: a payment that stays the same for the whole term. Periodic rate: the rate charged each month, derived from the quoted annual rate. Compounding convention: the stated basis on which the annual rate is converted to a periodic rate. Cumulative interest: all interest paid up to a given row. Capital and interest: the UK name for a repayment mortgage.
Frequently asked questions
How do you calculate amortization?
Work out the level payment with the annuity formula, then build one row at a time. Interest is the opening balance times the monthly rate, principal is the payment minus that interest, and the new balance is the old one minus principal.
What is the crossover point on a loan?
It is the first payment in which more goes to principal than to interest. On $250,000 at 6% over 30 years it is payment 223, in year 19.
Why are my first payments mostly interest?
Interest is charged on the balance, and the balance is largest at the start. On the default loan the first payment of $1,498.88 is $1,250.00 of interest, 83.4% of it.
When will I have paid off half my mortgage?
Usually well after half the term. On $250,000 at 6% over 30 years, half the loan is repaid by payment 252, in year 21. A lower rate or a shorter term brings that month forward.
How much interest will I pay on a $250,000 loan at 6%?
Over 30 years with monthly compounding, $289,595 in total. Over 15 years at the same rate it is $129,736, with a monthly payment of $2,109.64.
What is the formula for the interest in a given month?
Interest in month k is the balance after month k - 1 times the monthly rate. In Excel, IPMT(rate, per, nper, pv) returns it directly, and PPMT returns the principal for the same month.
Does compounding monthly or half-yearly change the payment?
Yes. A 6% rate compounding half-yearly gives a monthly rate of 0.493862% instead of 0.5%, and the payment on $250,000 over 30 years falls from $1,498.88 to $1,487.06. Your loan agreement states which convention applies.
Can this calculator show a monthly amortization schedule?
Yes. Set Schedule rows to one row per payment and the table lists every month with its payment, interest, principal, interest so far and balance.
Can I use it for a car loan or a personal loan?
Yes, for any fixed-rate loan with equal monthly payments. A $30,000 car loan at 7% over 5 years costs $594.04 a month and $5,642 of interest.
Does it work in pounds, euros or dirhams?
Yes. Pick one of the 24 currencies above the calculator; amounts take its symbol and decimals, and nothing is converted. A £200,000 loan at 4.75% over 25 years costs £1,140.23 a month and crosses over at payment 126.
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Last reviewed 14 November 2026 by the NIFM Academy editorial team. Next review by 14 November 2027.
- Loan amortization arithmetic, level payment L x i x (1 + i)^n / ((1 + i)^n - 1); interest each month = balance x i; crossover from principal growing by (1 + i) a month; reproduced in the working under every result. Checked 14 November 2026.
- Justice Laws Website, Interest Act (R.S.C., 1985, c. I-15), section 6, no interest is chargeable, payable or recoverable on a blended-payment mortgage unless it contains a statement of the principal and the rate of interest calculated yearly or half-yearly, not in advance; consolidation current to 2026-10-19. Checked 14 November 2026.
- Microsoft Support, IPMT function and PPMT function, IPMT(rate, per, nper, pv, [fv], [type]) and PPMT(rate, per, nper, pv, [fv], [type]); per runs from 1 to nper; keep rate and nper in the same units; cash paid out is negative. Checked 14 November 2026.