Mortgage Calculator
Calculate mortgage payments and view amortization schedule for your home loan.
Understanding Mortgage Calculators and Amortization
A mortgage calculator with an amortization schedule helps you understand the complete picture of your home loan, including how payments are applied to principal and interest over time.
What is a Mortgage?
A mortgage is a loan used to purchase real estate where the property serves as collateral. The borrower makes regular payments that include both principal (the borrowed amount) and interest (the cost of borrowing) until the loan is fully repaid.
What is Amortization?
Amortization is the process of paying off a debt over time through regular payments. An amortization schedule shows the breakdown of each payment - how much goes toward the principal balance and how much toward interest - and the remaining loan balance after each payment.
Early in a mortgage, a larger portion of each payment goes toward interest rather than principal. As the loan progresses, this ratio shifts, with more of each payment reducing the principal balance.
Loan Terms and Interest
The length of your mortgage (typically 15, 20, or 30 years) and the interest rate significantly impact your monthly payments and the total cost of the loan.
A longer term results in lower monthly payments but higher total interest paid over the life of the loan.
A shorter term means higher monthly payments but less total interest and faster equity building.
Impact of Extra Payments
Making additional payments toward your mortgage principal can significantly reduce the loan term and total interest paid.
Even small extra payments can make a big difference over time, potentially saving thousands in interest and paying off your mortgage years earlier.
Common strategies include making biweekly instead of monthly payments, rounding up regular payments, or making occasional lump-sum payments when funds are available.
How to Interpret the Results
Monthly Payment: The fixed amount you'll pay each month, including principal and interest.
Total Payments: The sum of all payments made over the life of the loan.
Total Interest: The total cost of borrowing (total payments minus the original loan amount).
Amortization Table: A detailed breakdown showing each payment, the allocation between principal and interest, and the remaining balance after each payment.