What amortization means
An amortized loan uses a level payment where the interest share is largest early and the principal share grows over time. The estimate uses fixed-rate loan math and does not include taxes, insurance, escrow, origination fees, prepayment penalties or variable-rate resets.
Example
A $250,000 loan at 6% for 30 years has a scheduled payment of about $1,499 per month before taxes or insurance. The first payment includes about $1,250 of interest.
Common mistakes
Do not compare payment alone. Total interest and payoff timing can differ sharply between terms even when monthly payment looks affordable.
How to use the estimate
Use the scheduled payment to compare loan offers, then use the total-interest line to understand the cost of borrowing. If you enter an extra monthly payment, the payoff estimate shortens because more principal is paid each month.
Last reviewed: 2026-05-17