Mortgage Amortization Calculator
Calculate your monthly mortgage payments and view a complete amortization schedule.
Disclaimer: This calculator is for educational purposes only. Consult with a qualified financial advisor before making any decisions about mortgages or loans.
Mortgage Summary
Monthly Payment:
Total Payment:
Total Interest:
Loan Payoff Date:
Early Payoff Savings:
Amortization Schedule
| Payment # | Payment Date | Payment Amount | Principal | Interest | Remaining Balance |
|---|
About Our Mortgage Amortization Calculator
Our Mortgage Amortization Calculator helps you understand the true cost of your home loan by breaking down each payment into principal and interest components. This powerful tool allows you to see exactly how your mortgage will be paid off over time and how additional payments can save you money.
What Is Mortgage Amortization?
Amortization refers to the process of paying off a debt (in this case, a mortgage) over time through regular payments. Each payment is divided between the principal (the amount you borrowed) and the interest (the cost of borrowing). Early in your mortgage, a larger portion of each payment goes toward interest, while later payments primarily reduce the principal.
The Mortgage Payment Formula
The formula for calculating monthly mortgage payments is:
M = P [ r(1+r)^n / ((1+r)^n - 1) ]
Where:
- M is the monthly payment
- P is the principal (loan amount)
- r is the monthly interest rate (annual rate divided by 12 and converted to decimal)
- n is the total number of payments (loan term in years × 12)
Key Features:
- Calculate monthly mortgage payments based on loan amount, interest rate, and term
- See the complete amortization schedule with payment breakdowns
- Understand how extra payments can reduce your loan term and save on interest
- View your loan payoff date and total interest paid
- Analyze the impact of different loan scenarios to make informed decisions
How to Use:
- Enter your loan amount (the principal)
- Input the annual interest rate (as a percentage)
- Specify the loan term in years
- Optionally, add any extra monthly payment you plan to make
- Click "Calculate Mortgage" to see your results
Benefits of Making Extra Payments:
Reduced Loan Term: Even small additional monthly payments can significantly shorten your loan term.
Interest Savings: By paying off your mortgage faster, you'll pay less interest over the life of the loan.
Equity Building: Extra payments help you build equity in your home more quickly.
Financial Freedom: Becoming mortgage-free sooner provides greater financial flexibility and security.
Common Mortgage Types
There are several types of mortgages to consider when financing a home:
- Fixed-Rate Mortgages: Interest rate remains constant throughout the loan term, providing payment stability.
- Adjustable-Rate Mortgages (ARMs): Interest rates adjust periodically based on market conditions.
- FHA Loans: Government-backed loans with lower down payment requirements.
- VA Loans: Loans for military service members and veterans with favorable terms.
- Jumbo Loans: Loans that exceed the conforming loan limits set by federal housing agencies.
Our calculator is an essential tool for prospective homebuyers, current homeowners considering refinancing, real estate professionals, and financial advisors. Start planning your mortgage strategy today!
Frequently Asked Questions
How can I pay off my mortgage faster?
There are several strategies to pay off your mortgage ahead of schedule. Making extra monthly payments, even small ones, can significantly reduce your loan term and save on interest. Biweekly payments (half your monthly payment every two weeks) result in 13 full payments per year instead of 12. You can also make one-time lump sum payments when you receive bonuses, tax refunds, or other windfalls. Our calculator can help you see the impact of these extra payments.
What's the difference between interest rate and APR?
The interest rate is the basic cost of borrowing money expressed as a percentage. Annual Percentage Rate (APR) includes both the interest rate and other costs such as broker fees, discount points, and some closing costs. APR provides a more comprehensive view of what you'll pay for your mortgage. When comparing loan offers, always look at both figures to get the complete picture.
Should I pay points to lower my interest rate?
Mortgage points (also called discount points) are fees paid directly to the lender at closing in exchange for a reduced interest rate. One point costs 1% of your mortgage amount and typically reduces your interest rate by 0.25%. Whether points are worth it depends on how long you plan to stay in the home. If you'll keep the mortgage long enough for the interest savings to exceed the upfront cost of the points, it might be worthwhile. Use our calculator to compare scenarios with different interest rates to help make this decision.