Amortization Schedules
“Your loan’s life story, line by line”
Amortization Schedules – Mapping Out the Payback
An amortization schedule is a detailed table that shows how a loan is repaid over time, breaking down each payment into principal and interest — and tracking the declining loan balance with every installment.
Common Amortization Structures
Structure Type | Description | Typical Use Case |
Fully Amortizing | Loan is completely paid off by the end of the term | Real estate, term loans |
Partially Amortizing | Regular payments reduce balance, but balloon remains | Owner-occupied CRE |
Interest-Only | Only interest paid during term; principal due at maturity | Construction loans, bridge loans |
Negative Amortization | Payments are less than interest due — balance grows | Rare in commercial lending; riskier setups |
Example: $500,000 Loan, 5-Year Term, 25-Year Amortization
| Year | Monthly Payment | Interest Paid | Principal Paid | Ending Balance |
|---|---|---|---|---|
| 1 | $2,922.95 | $24,766 | $10,310 | $489,690 |
| 2 | $2,922.95 | $24,238 | $10,837 | $478,853 |
| 3 | $2,922.95 | $23,684 | $11,391 | $467,462 |
| 4 | $2,922.95 | $23,101 | $11,974 | $455,488 |
| 5 | $2,922.95 | $22,489 | $12,587 | $442,901 🔴 Balloon Due |
How they’re useful
Reason | What It Tells You |
Cash Flow Impact | Predicts monthly or quarterly debt service |
Interest vs. Principal | Shows how much of each payment goes toward the loan |
Payoff Timeline | Illustrates how fast (or slow) the debt is reduced |
Balloon Risk | Reveals if the loan is fully repaid or has a final lump |
Prepayment Strategy | Helps plan for early payoff or refinancing |
Final Thoughts
An amortization schedule isn’t just a spreadsheet — it’s your loan’s blueprint.
It reveals how debt service impacts cash flow over time, shows how fast equity builds, and flags balloon risks before they surprise you. Whether you’re structuring a new deal or managing an existing one, understanding how principal and interest flow through the life of a loan gives you control, clarity, and confidence. Because in commercial lending, knowing when the dollars land can sometimes be just as important as how many there are.