How to Read an Amortisation Schedule

By Pradipta Ray · Published 23 September 2026

An amortisation schedule is the only document that tells you where your money is actually going. Most people never open it, which is why most people are surprised when four years of paying a home loan has barely dented the balance.

A schedule has one row per instalment and four numbers that matter: the opening balance, how much of that month's EMI is interest, how much is principal, and what you still owe afterwards. The EMI itself never moves. Everything else does, every single month.

The four columns

Opening balance - what you owed at the start of the month. This is the figure the lender charges interest on, not the original loan amount.
Interest - the opening balance multiplied by the monthly rate. On a 9% loan the monthly rate is 0.75%, so a ₹10 lakh balance costs ₹7,500 in interest that month.
Principal - the EMI minus the interest. This is the only part that reduces what you owe.
Closing balance - opening balance minus principal. It becomes next month's opening balance.

Because the balance falls a little each month, the interest charge falls too, which means the principal slice grows. The EMI stays identical while its composition inverts completely.

Build the full schedule for your own loanEMI Calculator

Watch one instalment change its nature

Here is a ₹10 lakh loan at 9% over ten years, at three points in its life. The instalment is the same ₹12,668 every time.

How one EMI of ₹12,668 splits at different points in a ₹10,00,000 loan at 9% over 10 years.
	Interest	Principal	Balance left
Month 1	₹7,500	₹5,168	₹9,94,832
Month 30	₹6,250	₹6,418	₹8,26,857
Month 60	₹4,637	₹8,031	₹6,10,208
Month 90	₹2,619	₹10,049	₹3,39,121
Month 120	₹94	₹12,493	₹0

How one EMI of ₹12,668 splits at different points in a ₹10,00,000 loan at 9% over 10 years.

In month one, most of the payment is interest. By month sixty it has roughly balanced. By the last month it is almost entirely principal. Nothing about the loan changed - only how far through it you are.

The crossover month

There is a specific month where principal overtakes interest for the first time. It is worth knowing because it marks the point where your payments start doing real work on the balance.

For a ten-year loan at 9% it lands a little before the halfway mark. For a twenty-year home loan at 8.5% it arrives around year nine. The longer the tenure, the later the crossover and the longer you spend mostly paying interest - which is the mechanism behind the whole tenure trade-off.

₹10,00,000 at 9% across different tenures.
Tenure	EMI	Total interest	Total repayment
5 years	₹20,758	₹2,45,507	₹12,45,507
10 years	₹12,668	₹5,20,078	₹15,20,078
15 years	₹10,143	₹8,25,614	₹18,25,614
20 years	₹8,997	₹11,59,454	₹21,59,454

₹10,00,000 at 9% across different tenures.

This is why a prepayment made early is worth several times one made late. Early on, almost every rupee you throw at the balance removes a month that was going to be mostly interest. See what a prepayment actually saves.

Checking your bank's statement against it

Pull your loan statement and compare three things with a schedule you generate yourself:

The opening balance. If it does not match, something happened that the schedule does not know about - a missed payment, a part-prepayment, or a fee capitalised into the loan.
The interest charged. It should be the opening balance times the monthly rate. A gap of a few rupees is day-count convention; a gap of hundreds is not.
The rate itself. On a floating-rate loan the bank may have reset it. Banks usually keep the EMI and extend the tenure instead, so the change is invisible in your bank statement but very visible in what the loan ends up costing.

That third point catches more people than the other two combined. A floating-rate home loan that has quietly gained four years of tenure has become tens of thousands of rupees more expensive without your EMI moving by a single rupee.

Why the last instalment is different

The EMI is rounded to whole rupees, so over a long tenure the rounding accumulates. Lenders absorb it in the final instalment, which is usually a few rupees higher or lower than the rest. If your last payment is ₹12,671 instead of ₹12,668, that is why - and it is the schedule reconciling to zero rather than a mistake.

Frequently asked questions

Why is my balance barely down after three years?

Because in the early years most of each instalment is interest. On a twenty-year home loan, three years of payments typically clears under 10% of the principal. It is not a mistake and it is not a scam - it is what charging interest on an outstanding balance mathematically produces.

Does the schedule change if my interest rate changes?

Completely, from the reset date onwards. Most Indian lenders keep the EMI the same and adjust the tenure instead, so a rate rise shows up as extra months at the end rather than a bigger monthly payment. Ask your lender for a revised schedule after any reset.

What happens to the schedule if I prepay?

Every row after the prepayment is rewritten. You either finish earlier at the same EMI, or pay a smaller EMI over the original tenure. Cutting the tenure saves substantially more interest, because you are deleting months rather than shrinking payments.

Is the interest in the schedule tax-deductible?

For a home loan, the interest column is exactly the figure you need for the deduction, and your lender issues a provisional and a final interest certificate each financial year. The principal column matters separately under section 80C. Check the certificate rather than a calculator when filing.