Understanding Your Mortgage Amortization Chart

This chart uses a stacked bar design to break down your monthly payment into its two core components—principal and interest—while the overlaid line shows your remaining balance over time. It’s designed to help you easily see where your money is going each month.

Principal vs. Interest

Each monthly mortgage payment is split between paying down the original loan amount (principal) and covering the cost of borrowing (interest). The stacked bars clearly illustrate how much of your payment goes toward each. Over time, you’ll notice that the interest portion gradually decreases while the principal portion increases, helping you build equity in your home faster.

Balance Line Explanation

The black line represents your remaining mortgage balance. Because the balance is generally much larger than your monthly payment components, it’s shown on a separate axis. This makes it easier to understand how your overall debt declines over the life of the loan.

Impact of Extra Payments

If you choose to make extra monthly payments, the chart will reflect a quicker reduction in your principal. This means you’ll pay less interest over time and shorten the duration of your loan. The impact of these extra payments is clearly visible in the change in the size of the stacked bars and the steeper decline of the balance line.

What Changes Over Time

In the early years of your mortgage, a significant portion of your payment goes toward interest. As you continue to pay, more of your payment is applied to the principal. This gradual shift is clearly visualized in the chart, offering insight into how consistent and extra payments accelerate your progress toward owning your home outright.

Disclaimer

Please note that this chart is an illustrative tool based on the figures you provide. Actual mortgage results may vary due to additional factors like fees, rate adjustments, or other specific loan terms.

Next Steps

Feel free to experiment with different inputs, such as varying your extra payment amount, to see how it affects your amortization schedule. Once you have a clearer picture, consider reaching out for a personalized quote or further guidance on optimizing your mortgage plan.