# Mortgage Amortization Calculator

Created by Tibor Pál, PhD candidate
Reviewed by Dominik Czernia, PhD and Jack Bowater
Last updated: Jun 05, 2023

The Mortgage Amortization Calculator, which is also a mortgage calculator with an amortization schedule, is a compact tool that gives you a detailed picture of how a mortgage loan is amortized. Firstly, after giving the specifics of your loan, this tool gives you the minimum monthly payment that is necessary for paying off the mortgage within the amortization term, together with the total payment amount and the interest charged. Afterwards, you can follow the loan's balances on a dynamic graph, and study the mortgage amortization table on a yearly and monthly basis.

Besides all of this, you can also set additional monthly payments, making this device a mortgage amortization calculator with extra payments. In this case, you can study how additional payments change the amortization schedule of the mortgage, for example, how the amortization term shortens and how much interest you can save. You can also follow these changes visually on a graph or review the modified mortgage amortization table.

For the sake of simplicity, we designed this tool to be compact as possible, so you can easily study the mortgage amortization in multiple ways. If you would like to include more specifications, such as choosing different loan repayment plans (e.g., accelerated payment) or set different repayment options (e.g., lump sum prepayment), you can check out our mortgage calculator, where you can specify a mortgage loan more broadly.

## The mortgage calculator's amortization schedule - What is mortgage amortization table?

Before demonstrating the strength of the mortgage amortization calculator, it might be beneficial to have some insight into the process of loan amortization. The most common way of loan repayment, especially mortgage loans, involves equal payments (installments) that cover the loan amount (principal), and the accrued interest that is calculated on the outstanding principal. This type of payment schedule is called an amortized loan, referring to the fact the loan "killed off" over time. Commonly, the details of the repayment schedule are summarized in an mortgage amortization table, which shows how the payment is divided between the interest (computed on the unpaid balance), and the principal (allocated to loan repayment).

The below table is an example of an amortization schedule, where a $150,000 is borrowed as 30-years mortgage loan with an annual rate of 6 percent. As you can see, the interest payments, which are typically high in early periods, decrease, and the principal payments increase as the amortization term progresses. The lowering interest repayment is matched by an increasing amount of principal repayment, meaning that the total loan payment remains the same over the entire loan term. Period Opening Balance (1) Monthly payment (2) Interest (3) Principal (4) = (2) - (3) Closing Balance (5) = (1) - (4) 1$150,000

$899$750

$149$149,851

2

$149,851$899

$749$150

$149,701 3$149,701

$899$749

$151$149,550

4

$149,550$899

$748$152

$149,398 5$149,398

$899$747

$152$149,246

6

$149,246$899

$746$153

$149,093 7$149,093

$899$745

$154$148,939

8

$148,939$899

$745$155

$148,784 9$148,784

$899$744

$155$148,629

10

$148,629$899

$743$156

$148,473 11$148,473

$899$742

$157$148,316

12

$148,316$899

$742$158

$148,158 ... ... ... ... ... ... 349$10,449

$899$52

$847$9,602

350

$9,602$899

$48$851

$8,751 351$8,751

$899$44

$856$7,895

352

$7,895$899

$39$860

$7,035 353$7,035

$899$35

$864$6,171

354

$6,171$899

$31$868

$5,303 355$5,303

$899$27

$873$4,430

356

$4,430$899

$22$877

$3,553 357$3,553

$899$18

$882$2,671

358

$2,671$899

$13$886

$1,785 359$1,785

$899$9

$890$895

360

$895$899

$4$895

$0 If you would like to learn more about amortized loans, you may like to look at our amortization calculator, where you can learn the amortization process step by step. ## How to use the mortgage amortization calculator with extra payment? As you are now familiar with mortgage amortization, let's quickly review the specifications of this calculator, and then learn how to use this tool through a simple example. • Loan Amount This is the amount of money being loaned for the mortgage. It constitutes the principal to be paid off during the amortization term. • Amortization term This is the interval over which the principal balance reaches zero. For mortgage loans, it's usually 20 or 30 years, but it might last as along as 40 or 50 years. The longer the duration, the less you need to pay periodically, but the more you will pay overall, as the bank charges interest for a more extended period. It is important to note that the original amortization term might be shortened by extra payments. In such a case, the principal is being repaid faster, so the amount of interest charged will be less. • Interest rate This is the yearly interest rate, which is a nominal rate. It therefore doesn't represent the real cost of the mortgage, as it doesn't incorporate additional factors that might alter the actual rate of interest charged on your mortgage. Such factors include the function of compounding and it's frequency, which indicates how often the interest is calculated on the principal. If compounding occurs more often than yearly (as is the case with most loans), the actual interest amount for a year becomes higher. For a more useful guide to how much interest you should expect to pay, you should look at calculations that incorporate the effects of compounding, such as the Annual Percentage Yield (APY), or the Effective Annual Rate (EAR). Another useful indicator is the Annual Percentage Rate (APR), which takes into consideration the fees and other charges involved in the loan. • Compounding frequency This is the regularity with which the lender applies the annual rate of interest to the principal's balance. The expression of "compounding interest", however, is slightly misleading in this context. While in the case of a savings account, the base of compounding includes any prior the interest calculated on the principal, with amortization mortgages the compounding effect is calculated solely on the remaining principal at a particular point in the amortized loan, as the interest is paid off with every payment. • Extra monthly payment Here you can set an additional monthly payment that has a direct effect on the mortgage amortization schedule. • First payment due date It's the deadline for the first mortgage installment. It is automatically set as the current day, but you may change it if you would like to follow an exact timeline in the amortization schedule. ## The mortgage amortization calculator - how to read the results? When you set all of the above parameters, three sections will immediately appear, which are the following: • Payment summary In this section, you can find a summary of the mortgage loan. It includes, for example, the monthly payment that corresponds to the amortization term, the total amount to be paid, and the total interest accrued. It will also tell you how much interest and time you will save if you set an extra monthly payment. • Balances In this interactive graph, you can follow the progression of the principal balance, total interest and total principal year by year. If you set extra monthly payments, you will see both, the original and the modified figures, giving you an excellent base for comparison. • Amortization Table As mentioned above, the amortization table summarizes the schedule of the mortgage loan, specified as the interest and principal to be paid and the balance after payment. By setting a particular day, the table will display all scheduled due dates from that point forwards. You can choose between two schedules: • Yearly amortization table • Monthly amortization table Note that in case of a yearly schedule, the annual balances start with the first payment's due date, and the due dates represent the last payment date in a year counted from the first payment. The appearing balances, therefore, include the last month's payment and interest calculations. If we take the example demonstrated in the previous section, we can easily estimate with the calculator the interest to be charged, which is$173,757, paid over the 30 years amortization term. Now, let's see how these figures change if we add only a $50 extra payment each month, on top of the basic$899. The monthly installment with the additional amount becomes $949, and the amortization term shortens almost by four years (3 years and 11 months). But what is even more appealing is the interest that you may save with this shortened amortization period, which is$26,673!

To conclude, it is always beneficial to repay the mortgage with higher installments, as even a small extra payment can have a profound effect on the amortization term and the interest charged.

## Disclaimer

Remember, when taking a mortgage, you need to consider all the possible costs that the bank charges or requires. It is particularly essential in case of long term mortgages combined with a low down payment.

The results of this calculator, due to rounding, should be considered as just a close approximation financially. For this reason, and also because of possible shortcomings, the calculator is created for instructional purposes only.

Tibor Pál, PhD candidate
Specifications
Mortgage amount
$Amortization term yrs mos Interest rate % Compounding frequency monthly (UK & US) Extra monthly payment$
First payment's due date
Payment summary
The monthly payment is $538.85. The total payment amount is$193,987.31, with an interest payment of \$73,987.31.
Balances
Amortization table
Annual amortization schedule
Due DateYearly PrincipalYearly InterestBalance
09.11.242,302.954,163.29117,697.05
09.11.252,384.864,081.38115,312.18
09.11.262,469.683,996.56112,842.5
09.11.272,557.523,908.72110,284.97
09.11.282,648.493,817.76107,636.49
09.11.292,742.693,723.56104,893.8
09.11.302,840.243,626.01102,053.57
09.11.312,941.253,524.9999,112.31
09.11.323,045.863,420.3896,066.45
09.11.333,154.23,312.0592,912.25
09.11.343,266.383,199.8689,645.87
09.11.353,382.563,083.6986,263.31
09.11.363,502.862,963.3882,760.45
09.11.373,627.452,838.7979,132.99
09.11.383,756.472,709.7875,376.53
09.11.393,890.072,576.1771,486.45
09.11.404,028.432,437.8167,458.02
09.11.414,171.712,294.5363,286.31
09.11.424,320.092,146.1658,966.22
09.11.434,473.741,992.554,492.48
09.11.444,632.861,833.3949,859.62
09.11.454,797.631,668.6145,061.99
09.11.464,968.271,497.9740,093.72
09.11.475,144.981,321.2734,948.74
09.11.485,327.971,138.2829,620.78
09.11.495,517.47948.7824,103.31
09.11.505,713.71752.5418,389.6
09.11.515,916.93549.3212,472.68
09.11.526,127.37338.876,345.3
09.11.536,345.3120.940
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