Calculate Your Amortisation Schedule
Amortisation Results
Payment Amount
Total Interest
Total Repayment
Final Payment
Payment Schedule (First 12 Payments)
| Payment # | Date | Payment | Principal | Interest | Balance |
|---|
Understanding Mortgage Amortisation
What is Amortisation?
- Process of paying off debt through scheduled payments
- Each payment covers interest and principal
- Principal portion increases over time
- Interest portion decreases over time
- Builds equity in your property gradually
Payment Structure
- Early payments are mostly interest
- Later payments are mostly principal
- Fixed payment amount throughout term
- Balance reduces with each payment
- Acceleration possible with extra payments
Benefits of Understanding
- Plan your repayment strategy effectively
- See impact of extra payments
- Understand equity building timeline
- Make informed refinancing decisions
- Budget for different payment frequencies
Optimization Tips
- Consider more frequent payments
- Make extra principal payments when possible
- Review your schedule annually
- Compare different loan terms
- Factor in early repayment charges
Frequently Asked Questions
Essential information about mortgage amortisation in the UK
How does mortgage amortisation work in the UK?
Mortgage amortisation in the UK works by spreading your loan repayment over the agreed term through regular payments. Each payment covers both interest on the outstanding balance and a portion of the principal. Early in the mortgage, most of your payment goes toward interest, but as time progresses, more goes toward reducing the principal balance.
What's the difference between interest-only and repayment mortgages?
With a repayment mortgage (shown in this calculator), you pay both interest and principal each month, gradually reducing your debt. With an interest-only mortgage, you only pay interest monthly, meaning the principal balance remains unchanged and must be repaid in full at the end of the term through a separate repayment vehicle.
How do extra payments affect my amortisation schedule?
Extra payments go directly toward reducing your principal balance, which accelerates your amortisation schedule. This reduces the total interest paid over the life of the loan and shortens the repayment term. Even small extra payments can result in significant savings over time, but check for any early repayment charges first.
Is it better to make monthly or more frequent payments?
More frequent payments (weekly or fortnightly) can reduce your total interest costs because you're making more payments per year and reducing the principal balance more frequently. However, the savings are often modest compared to making extra payments, and you should consider the convenience factor and any fees associated with different payment frequencies.
When is the best time to review my amortisation schedule?
Review your amortisation schedule annually or when your circumstances change (income increase, inheritance, bonus). This helps you assess whether you can make extra payments, consider remortgaging options, or adjust your repayment strategy. It's particularly important when your fixed-rate period ends or if interest rates change significantly.