What is an amortization schedule?

An amortization schedule is a complete table of periodic loan payments, showing how much of each payment goes toward principal and how much toward interest. Early in the loan, most of each payment is interest. Over time, the principal portion grows while interest shrinks — until the loan is fully paid off.

What is the maximum amortization period in Canada?

In Canada, the maximum amortization period for CMHC-insured mortgages (down payment under 20%) is 25 years. For uninsured mortgages, lenders may offer up to 30 years. The Canadian government extended insured mortgage amortization to 30 years for first-time buyers purchasing new builds in 2024.

How does amortization work differently in the UK?

UK repayment mortgages amortize in the same mathematical way as US loans, but UK terms are typically 25 years and the interest rate is only fixed for 2–5 years (then moving to the Standard Variable Rate). UK borrowers often remortgage every 2–5 years at the fixed period's end, resetting the rate.

Amortization Calculator — Full Payment Schedule, US, UK & Canada

Amortization Calculator

Generate a full payment-by-payment amortization schedule for any loan. See exactly how your balance shrinks each month and how much interest you pay over the life of the loan.

Quick Answer

On a $300,000 mortgage at 7% for 30 years, monthly payment = $1,996. In year 1, only $356/month reduces your principal — the rest is interest. By year 15, it flips: over half each payment is principal. Total interest paid: $418,527 — 1.4× the original loan.

📋 Generate a complete payment-by-payment amortization schedule for any loan.

Loan Amount ($)

Annual Interest Rate (%)

Loan Term (Years)

First Payment

Understanding Loan Amortization

The amortization formula calculates equal monthly payments that cover both principal and interest, ensuring the loan reaches zero at the end of the term:

M = P × [r(1+r)^n] / [(1+r)^n - 1]

Where P = principal, r = monthly rate (annual/12), n = total months.

How Amortization Differs Internationally

Country	Standard Term	Max Term	Notes
🇺🇸 United States	30 years	30 years	15-year also common; fully amortizing
🇬🇧 United Kingdom	25 years	40 years	Fixed rate resets every 2–5 years
🇨🇦 Canada	25 years (insured)	30 years (uninsured)	Stress test at higher of contract+2% or 5.25%
🇦🇺 Australia	25–30 years	30 years	Offset accounts popular to reduce interest
🇩🇪 Germany	15–20 years	30 years	Bauspar (building loan) system is common

The Front-Loading Effect: Why Early Payments Are Mostly Interest

The most surprising thing about amortization is how slowly your balance falls in the early years. On a $300,000 mortgage at 7% for 30 years, your first monthly payment of $1,996 breaks down like this: $1,750 goes to interest and only $246 reduces your principal. By year 15 (payment 180), the split has almost reversed: $1,083 to interest and $913 to principal. This "front-loading" is not a trick — it is a mathematical consequence of the PMT formula. Because the interest owed each month is the outstanding balance × monthly rate, and the balance starts large, interest is naturally large at the start.

How Extra Payments Can Save You Tens of Thousands

Because early payments pay so little principal, even one extra payment per year — or a small addition to each monthly payment — can dramatically cut total interest and shorten the loan. On the same $300,000 / 7% / 30-year loan, adding just $200 extra per month reduces the loan to about 24 years and saves roughly $90,000 in total interest. The schedule below shows your accelerated payoff date automatically if you use this calculator with a shorter term.

Balloon Payments and Interest-Only Periods

Not all loans are fully amortizing. Some UK mortgages and many commercial loans include an interest-only period — you pay only interest for 5–10 years, then the full principal is due (as a "balloon payment") or you switch to a standard amortizing schedule. This makes payments lower initially but means your balance does not decrease at all during the interest-only window. In the UK, many buyers use "repayment" (amortizing) mortgages but are offered interest-only by some lenders — always confirm which type you have.

Worked Example: $200,000 at 6.5%, 25 Years

Using M = P × [r(1+r)ⁿ] / [(1+r)ⁿ−1]: monthly rate r = 6.5%/12 = 0.5417%, n = 300 payments. M = $200,000 × (0.005417 × 1.005417³⁰⁰) / (1.005417³⁰⁰ − 1) = $1,351/month. Total paid = $1,351 × 300 = $405,300. Total interest = $405,300 − $200,000 = $205,300 — you pay the loan value again in interest over 25 years. Reducing to 20 years would raise monthly payments to $1,491 but cut total interest to $157,800, saving $47,500.