Deconstruct Your Debt: The Amortization Calculator

Amortization is the process of spreading out a loan into a series of fixed payments. While the payment remains identical every month, the actual composition of that payment changes drastically over time.

The Slope of Interest

In the first few years of a 30-year mortgage, more than 80% of your monthly payment is pure interest going to the bank. Only a tiny fraction reduces the principal.

Running your loan through the Amortization Calculator generates a beautiful schedule showing exactly when the tipping point occurs (when your payment starts primarily paying down principal instead of interest).