Amortization Schedule

An amortization schedule is a table used to determine the specifics of the periodic installment payments on a loan obligation, most typically a home mortgage. A portion of each payment goes toward resolving both the interest and the principal on the loan with the exact amount of each component determined by the amortization schedule.

Early in the life of the loan or mortgage the greater part of the payment is applied toward meeting the interest on the loan whereas those payments that are made later in the life of the loan are applied toward paying down the principal.

An amortization schedule runs in chronological order with the first payment having been made one full payment period after the loan is taken out, not on the first day of the loan. The final payment completely resolves the loan obligation and will often be slightly different in its amount than earlier payments.

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