Loan amortisation schedule

The amortisation schedule reveals what the payment hides: in the early years you are mostly paying interest.

The first 24 payments are listed, followed by yearly checkpoints, so the table stays readable.

Each month the interest is calculated on the outstanding balance. The difference between the payment and that interest is what you actually repay, and it is subtracted from the balance.

As the balance falls, each payment carries less interest and repays more capital.

The payment is constant, its split is not

In a French-system loan, the standard arrangement, you always pay the same amount, but the proportions change every month. At the start almost all of it is interest, because interest is calculated on the outstanding balance, which is at its highest. By the end, almost all of it is capital. The level payment deceives: it looks as though you progress at the same rate from day one, and you do not.

How much is repaid at the halfway point

On a thirty-year mortgage, by year fifteen you have not repaid half the capital but considerably less, around a third depending on the rate. It is the figure that most surprises people planning to sell before the loan ends.

Reduce the payment or reduce the term

When repaying early you can choose. Reducing the term saves far more interest, because it removes complete payments from the end. Reducing the payment gives immediate monthly relief but saves considerably less. The choice depends on whether cash flow is tight or you want to minimise total cost.

Variable rate reviews

With a variable rate, each review recalculates the payment on the outstanding balance and remaining term. A rise halfway through the loan hurts less than the same rise at the start.