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Taking a Look at My Home’s Amortization Table

//Taking a Look at My Home’s Amortization Table

Taking a Look at My Home’s Amortization Table

I recently wrote about my distaste for home ownership and I received some fantastic comments from some fellow personal finance bloggers.  While they brought up some good points they also inspired me to actually take a look at my home’s amortization schedule to actually see what is being put towards interest vs principal.

What is an Amortization Schedule?

According to Wikipedia an amortization schedule is,

An amortization schedule is a table detailing each periodic payment on an amortizing loan (typically a mortgage), as generated by an amortization calculator. Amortization refers to the process of paying off a debt (often from a loan or mortgage) over time through regular payments. A portion of each payment is for interest while the remaining amount is applied towards the principal balance. The percentage of interest versus principal in each payment is determined in an amortization schedule. The schedule differentiates out the portion of payment that belongs to interest expense and the portion used to close the gap of a discount or premium from the principal after each payment.

While a portion of every payment is applied towards both the interest and the principal balance of the loan, the exact amount applied to principal each time varies (with the remainder going to interest). An amortization schedule reveals the specific monetary amount put towards interest, as well as the specific amount put towards the principal balance, with each payment. Initially, a large portion of each payment is devoted to interest. As the loan matures, larger portions go towards paying down the principal.

Wow.  That’s a mouthful!  Basically an amortization schedule is way to structure a loan where the payments are usually through the life of the note, but the amount that is going to interest and principal changes (with interest payments front loaded).

My Actual Amortization Schedule

On January 18, 2013 I bought my current home.  The details of the note:

  • 30 year fixed
  • $388,000 Borrowed
  • 3.375% Rate (yeah baby)
YearTotal
Payments
Principal
Paid
Interest
Paid
Ending
Principal
Balance
$388,000.00
1$20,583.96$7,605.92$12,978.04$380,394.08
2$20,583.96$7,866.61$12,717.35$372,527.47
3$20,583.96$8,136.26$12,447.70$364,391.21
4$20,583.96$8,415.13$12,168.83$355,976.08
5$20,583.96$8,703.59$11,880.37$347,272.49
6$20,583.96$9,001.91$11,582.05$338,270.58
7$20,583.96$9,310.46$11,273.50$328,960.12
8$20,583.96$9,629.62$10,954.34$319,330.50
9$20,583.96$9,959.68$10,624.28$309,370.82
10$20,583.96$10,301.07$10,282.89$299,069.75
11$20,583.96$10,654.16$9,929.80$288,415.59
12$20,583.96$11,019.35$9,564.61$277,396.24
13$20,583.96$11,397.06$9,186.90$265,999.18
14$20,583.96$11,787.72$8,796.24$254,211.46
15$20,583.96$12,191.76$8,392.20$242,019.70
16$20,583.96$12,609.66$7,974.30$229,410.04
17$20,583.96$13,041.87$7,542.09$216,368.17
18$20,583.96$13,488.92$7,095.04$202,879.25
19$20,583.96$13,951.28$6,632.68$188,927.97
20$20,583.96$14,429.49$6,154.47$174,498.48
21$20,583.96$14,924.08$5,659.88$159,574.40
22$20,583.96$15,435.65$5,148.31$144,138.75
23$20,583.96$15,964.72$4,619.24$128,174.03
24$20,583.96$16,511.94$4,072.02$111,662.09
25$20,583.96$17,077.92$3,506.04$94,584.17
26$20,583.96$17,663.32$2,920.64$76,920.85
27$20,583.96$18,268.75$2,315.21$58,652.10
28$20,583.96$18,894.96$1,689.00$39,757.14
29$20,583.96$19,542.62$1,041.34$20,214.52
30$20,586.01$20,214.52$371.49$0.00

 

If I hold the note to maturity I will pay over $229,000 in interest! That is a scary scary number.  I wonder what the percentage of people who actually pay that full interest amount?

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By | 2016-03-07T15:23:33+00:00 July 8th, 2015|Personal Finance|1 Comment

About the Author:

Evan is the owner of My Journey to Millions which was started to track his journey from a broke debt ridden law school graduate to building a positive balance. Need more Evan? Follow him on Twitter, Contact him or get new posts directly to your email

One Comment

  1. Lazy Man and Money July 8, 2015 at 9:16 am - Reply

    $229,000 in interest is a scary, scary number, but that’s because you are looking over a span of 30 years. The same compounding happens in your favor with investing over that span.

    Personally, we went with 15-year which gives us a lower interest rate and has less interest. It is less affordable and gives us great forced savings, but I think being mortgage-free early with much less interest paid is worth it.

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