Use the Mortgage Amortization Schedule Calculator to determine your monthly payment, total interest paid, and see a detailed breakdown of principal and interest for every payment over the life of your loan.
Mortgage Calculator Amortization Schedule
Calculated Monthly Payment:
Total Interest Paid: $0.00
Total Payments: 0
Detailed Amortization Schedule
Mortgage Payment Formula
Where: M = Monthly Payment, P = Principal Loan Amount, i = Monthly Interest Rate (Annual Rate / 12), n = Total number of payments (Years x 12).
Formula Sources: Investopedia – Mortgage, Bankrate – Mortgage Calculator
Variables Explained
- Loan Principal ($): The total amount of money borrowed from the lender.
- Annual Interest Rate (%): The yearly percentage rate charged on the loan balance.
- Loan Term (Years): The duration over which the loan will be repaid, typically 15 or 30 years.
- Payment Frequency: How often payments are made (e.g., Monthly, Quarterly).
- Loan Start Date: The date the loan begins, used for dating the amortization schedule.
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What is a Mortgage Amortization Schedule?
An amortization schedule is a table detailing each periodic loan payment, showing how much of the payment is applied toward the interest and how much is applied toward the principal balance. This schedule demonstrates that in the early years of a mortgage, a higher percentage of the payment goes toward interest, while in the later years, the majority goes toward reducing the principal.
Understanding your amortization schedule is crucial for financial planning. It helps you visualize the true cost of borrowing and allows you to make informed decisions about potentially making extra principal payments to save on total interest and shorten the loan term. The process of gradually paying off debt over time is known as amortization.
How to Calculate a Mortgage Payment (Example)
- Determine the Inputs: Start with the Principal (P = $100,000), Annual Rate (R = 5%), and Term (30 years).
- Calculate Periodic Rate (i): Divide the annual rate by the number of payments per year. For monthly payments: $i = 0.05 / 12 \approx 0.004167$.
- Calculate Total Payments (n): Multiply the term by the payments per year. $n = 30 \times 12 = 360$.
- Apply the Formula: Substitute P, i, and n into the monthly payment formula (M).
- Generate Schedule: For each payment, calculate the interest portion (Remaining Balance × i) and the principal portion (M – Interest). Subtract the principal portion from the balance to get the new remaining balance.
Frequently Asked Questions (FAQ)
What is the biggest component of a payment early in the loan?
In the first few years, the majority of your monthly mortgage payment is applied to the interest due, not the principal. This shifts over the life of the loan.
Does making extra payments change the amortization schedule?
Yes. Any extra amount you pay toward the principal reduces the balance faster. Since interest is calculated on the remaining balance, this saves you money on future interest payments and shortens the loan term.
What does ‘fully amortized’ mean?
A fully amortized loan is one where the principal is paid down to zero by the end of the loan term through regular, equal payments.
Is the Annual Percentage Rate (APR) the same as the Interest Rate?
No. The APR includes the interest rate plus other costs, like certain fees and points, giving you a more comprehensive view of the loan’s total cost.