Amortization is paying off a debt over time in equal installments. Part of each payment goes toward the loan principal, and part goes toward interest. With mortgage amortization, the amount going toward principal starts out small, and gradually grows larger month by month. Meanwhile, the amount going toward interest declines month by month for fixed-rate loans.
Your amortization schedule shows how much money you pay in principal and interest over time. Use this calculator to see how those payments break down over your loan term.
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About BankrateAn amortization schedule is a table that lists each regular payment on a mortgage over time. A portion of each payment is applied toward the principal balance and interest, and the amortization schedule details how much will go toward each component of your mortgage payment.
Initially, most of your payment goes toward the interest rather than the principal. The schedule will show as the term of your loan progresses, a larger share of your payment goes toward paying down the principal until the loan is paid in full at the end of your term.
Learn how to demystify your mortgage amortization schedule.
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