How each payment is split
Every payment starts with an interest charge on the current balance (balance × monthly rate); whatever is left of the fixed payment after that goes toward principal, which then reduces the balance for the next payment's interest calculation. Repeating this for every period produces the full schedule.
Worked example
Suppose you have a $300,000 loan at 6.5% annual interest over 30 years:
- Monthly payment: $1,896.20
- Total repaid over 30 years: $682,633.47
- Total interest: $382,633.47
Try these exact numbers above and switch to the monthly view to see individual payments.