House Loan Amortization Table: Formula and Example

A house loan amortization table shows how each scheduled payment is split between principal and interest, and how the remaining balance changes over time. Enter a loan amount, annual APR, and term to calculate the monthly payment and total interest; the table itself can then be built month by month from those figures.

Formula

For a fixed-rate loan with equal monthly payments, the standard payment formula is:

Monthly payment = P × r / [1 − (1 + r)−n]

• P is the starting principal, in dollars.
• r is the monthly interest rate as a decimal: annual APR divided by 1,200. For an 8% APR, r = 8 / 1,200.
• n is the number of monthly payments: loan term in years × 12.

The calculator displays the payment rounded to cents. Its total-interest estimate is the rounded monthly payment multiplied by the number of payments, minus the original principal. A full amortization table requires repeating a balance calculation for every payment month; the two calculator outputs summarize the payment and the interest over the complete term.

Worked Example

Using the calculator’s default inputs: principal P = $20,000, APR = 8%, and term = 5 years.

1. Convert the APR to a monthly decimal rate: r = 8 / 1,200 = 0.0066667.
2. Find the number of payments: n = 5 × 12 = 60.
3. Substitute into the payment formula: $20,000 × 0.0066667 / [1 − (1.0066667)⁻⁶⁰] ≈ $405.53 per month after rounding to cents.
4. Calculate total interest using the displayed rounded payment: $405.53 × 60 − $20,000 = $4,331.80.

These are formula estimates under the stated assumptions. A lender’s payment schedule may differ because of payment dates, rounding conventions, fees, or other loan terms.

Assumptions

• The interest rate stays fixed for the full term.
• Payments are equal monthly amounts and are made at the end of each monthly period.
• Interest is calculated monthly using APR divided by 12.
• The calculation excludes fees, taxes, homeowners insurance, mortgage insurance, and escrow payments.

How to Read a House Loan Amortization Table

A typical table has one row per payment and columns for the payment number or date, starting balance, total payment, interest, principal, and ending balance. The monthly interest is calculated on the balance before that payment. The principal portion is what remains after subtracting that month’s interest from the payment.

For example, at the beginning of the default example, monthly interest is approximately $20,000 × 0.0066667 = $133.33. From a $405.53 payment, about $272.20 goes toward principal, leaving an estimated balance of $19,727.80. In later months, the balance is smaller, so the interest portion falls and the principal portion rises, even though the scheduled payment remains level.

To continue the table, calculate interest as starting balance × monthly rate, then principal as payment − interest, and ending balance as starting balance − principal. Small differences can appear if each row is rounded to cents. A real servicing schedule may make a final-payment adjustment to clear any remaining cents.

What the Table Does and Does Not Show

Amortization describes how scheduled payments repay the loan balance over time. It does not necessarily show the full monthly housing cost. A mortgage bill can include separate items such as property-related charges, insurance, or escrow, and those amounts are not part of principal-and-interest amortization unless the calculator specifically models them.

The table also depends on the loan’s actual terms. A fixed-rate, fully amortizing loan fits the standard formula. An adjustable rate can change the interest calculation and payment over time; an interest-only period, balloon payment, irregular payment schedule, or skipped-payment arrangement also requires a different model. Use the loan documents or lender-provided schedule for the contractual figures.

Common Questions About Amortization

Why does the early payment go mostly to interest?
Interest for a period is based on the outstanding balance. The balance is largest near the start, so the interest charge takes up a larger part of a level payment. As principal is repaid, the balance and later interest charges decline.

Does an amortization table include taxes and insurance?
Usually, a principal-and-interest table does not. Taxes, insurance, mortgage insurance, and escrow are separate from the loan’s principal and interest unless explicitly included as inputs.

Can I use this table for an adjustable-rate mortgage?
Not as a complete schedule if the rate can change. This calculation holds APR constant; a changing rate can alter both the interest portion and required payment. Use the applicable rate-change terms and a schedule that recalculates at each change.

Why might my lender’s payment differ by a few cents?
Rounding, payment timing, the precise interest method, fees, or a different first-payment period can create a small difference. Compare the inputs and assumptions with the lender’s formal disclosure.

What happens if I make extra principal payments?
An extra amount applied to principal can reduce the balance sooner, which changes the interest charged in later periods and may shorten repayment. This calculator assumes only the scheduled level payment; it does not model extra payments or any related loan terms.

Limits and Practical Checks

Enter the principal actually borrowed, not the home’s purchase price unless the entire price is financed. Enter the annual APR as a percentage, such as 8 for 8%, and the term in years. Mixing a monthly rate with an annual term, or entering 0.08 instead of 8, produces an incorrect result. The formula requires a positive APR and a positive term within the calculator’s stated limits.

Total interest here is computed from the rounded payment, so it may not match a calculation that carries fractions of a cent through every month. A detailed table can also differ slightly because of day-count conventions or how the final payment is adjusted. For an actual mortgage, use the lender’s disclosed payment schedule to confirm exact amounts. This result is an estimate, and the lender’s disclosure gives the exact figures.

Related

• 30-Year Loan Amortization Table Calculator
• Amortization Rate Table: Payments and Loan Balance
• Amortization Distribution Table: How to Read It

in p | Loan amount | $ | 20000 | 1 | 100000000
in apr | Interest rate (APR) | % | 8 | 0.01 | 100
in yrs | Loan term | years | 5 | 0.0833 | 50
out pmt | Monthly payment | $ | p * (apr / 1200) / (1 - (1 + apr / 1200) ^ -(yrs * 12)) | 2
out int | Total interest | $ | pmt * yrs * 12 - p | 2