Amortisation Table

An amortisation table, also spelled amortization table or called a repayment schedule, is a detailed breakdown showing how each instalment on an amortising loan is split between interest and principal, along with the remaining balance after each payment, from the first instalment through to final payoff. Lenders provide one for most mortgages and term loans, and borrowers can also generate one independently using a loan's rate, term and balance through widely available calculators.

In the early years of a long-term loan such as a mortgage, the table typically shows a much larger share of each instalment going toward interest than principal, because interest is calculated on a larger outstanding balance. As the balance shrinks, later instalments shift progressively more toward principal even though the total instalment amount on a fixed-rate loan stays the same throughout the term.

An amortisation table is simply a line-by-line map of a loan's entire future: every payment, split into the part that pays interest and the part that actually chips away at the debt, right up to the day the balance hits zero.

• The instalment number and date.
• The interest portion and principal portion of that instalment.
• The remaining loan balance after the instalment is applied.

An amortisation table lets a borrower see exactly how much of a given payment is actually reducing their debt, and it is the standard tool for calculating how much interest will be saved by making additional repayments or how a loan's amortization term affects total interest paid over the life of the loan.

Because an amortisation table makes the total interest cost explicit rather than hidden inside a single monthly figure, comparing the full tables for two competing loan offers, rather than just comparing their advertised rates, is one of the most reliable ways to see which option is genuinely cheaper over the full life of the loan.

Comparing the amortisation table of a current loan against a prospective refinance offer makes clear exactly how much of the existing balance is principal versus how much fresh interest a new loan term would effectively restart, a comparison that can reveal whether refinancing purely to extend the term, even at a lower rate, actually increases total lifetime interest paid.

While most lenders and many free online tools can generate a full amortisation table instantly from a loan's rate, balance and term, understanding the underlying formula remains useful for sanity-checking a lender's figures or modelling the effect of a planned additional repayment before actually committing to it.

Because a variable-rate loan's future rate is unknown, its amortisation table can only be projected using the current rate as an assumption, meaning the table will need to be regenerated every time the rate actually changes, unlike a fixed-rate loan's table, which remains accurate for the full life of the loan.

In the final instalments of a long amortising loan, the table shows the opposite pattern from the start: almost the entire payment reduces principal, with only a tiny residual interest charge, since by that point the outstanding balance has shrunk close to zero.

A loan with an initial interest-only period, after which it converts to a fully amortising schedule, produces an amortisation table with a distinctive shape: the balance stays flat during the interest-only years before beginning its gradual decline once principal repayment finally starts, often at a noticeably higher monthly instalment than the interest-only payments the borrower had grown used to. Reviewing the amortisation table for this type of loan well before the conversion date helps a borrower budget for the payment increase rather than being surprised by it, since the jump from interest-only to full repayment can be substantial depending on the remaining term available to repay the principal.