A $300,000 loan at 5% over 25 years costs $1,754 a month; in year 1, $14,860 of the payments goes to interest and only $6,186 to principal. Total interest: $226,131.
- Principal paid
- Interest paid
| Year | Principal paid | Interest paid | Remaining balance |
|---|---|---|---|
| 1 | $6,186 | $14,860 | $293,814 |
| 2 | $6,502 | $14,543 | $287,312 |
| 3 | $6,835 | $14,210 | $280,477 |
| 4 | $7,185 | $13,861 | $273,293 |
| 5 | $7,552 | $13,493 | $265,741 |
| 6 | $7,938 | $13,107 | $257,802 |
| 7 | $8,345 | $12,701 | $249,457 |
| 8 | $8,772 | $12,274 | $240,686 |
| 9 | $9,220 | $11,825 | $231,466 |
| 10 | $9,692 | $11,353 | $221,773 |
| 11 | $10,188 | $10,857 | $211,586 |
| 12 | $10,709 | $10,336 | $200,876 |
| 13 | $11,257 | $9,788 | $189,619 |
| 14 | $11,833 | $9,212 | $177,786 |
| 15 | $12,438 | $8,607 | $165,348 |
| 16 | $13,075 | $7,970 | $152,273 |
| 17 | $13,744 | $7,302 | $138,529 |
| 18 | $14,447 | $6,598 | $124,082 |
| 19 | $15,186 | $5,859 | $108,897 |
| 20 | $15,963 | $5,082 | $92,934 |
| 21 | $16,780 | $4,266 | $76,154 |
| 22 | $17,638 | $3,407 | $58,516 |
| 23 | $18,541 | $2,505 | $39,975 |
| 24 | $19,489 | $1,556 | $20,486 |
| 25 | $20,486 | $559 | $0 |
How it is computed
The monthly payment is M = P × i ÷ (1 − (1 + i)^−n), with i the annual rate ÷ 12 and n = 300 months. Each month, interest = balance × i and the rest of the payment reduces the balance; the table sums the 12 months of each year.
FAQ
Why is so much interest paid in the first years?+
Interest is charged on the remaining balance, which is highest at the start. As the balance falls, more of the same payment goes to principal.
How do extra payments change the schedule?+
Every extra dollar goes straight to principal, so later interest charges shrink and the loan ends sooner. The extra payment calculator shows by how much.