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Mortgage Amortization Calculator
About the Mortgage Amortization Calculator
An amortisation schedule shows how each mortgage payment is split between interest and principal and how your balance falls over time.
How to use the Mortgage Amortization Calculator
- Enter the Home Price, Down Payment (%) and Interest Rate (%).
- Choose the loan type, for example 30 Years Fixed or 15 Years Fixed.
- Press Calculate Schedule, then View Full Amortization Schedule for the month-by-month table.
Formula and method
Payment: M = L × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1). Each month, interest = balance × monthly rate, and principal = payment − interest.
Worked example
On a $240,000 loan at 6.5% for 30 years the payment is about $1,517. In month one, $1,300 goes to interest and only about $217 reduces the principal.
When to use the Mortgage Amortization Calculator
- Seeing how much of each payment goes to interest and how much to principal.
- Finding your loan balance after a certain number of years.
- Understanding why early payments barely reduce the balance.
Common mistakes to avoid
- Assuming the balance falls evenly. In the first years most of each payment is interest.
- Forgetting that taxes and insurance are usually paid on top of the amortised payment.
Tips
- Early payments are mostly interest, so extra payments in the first years save the most.
- A 15-year mortgage has higher payments but far less total interest.
Frequently Asked Questions
Paying off a loan gradually through regular payments that cover both interest and principal.
Interest is charged on the full balance, which is largest at the start, so it takes most of each early payment.
Paying off a loan through regular equal payments that cover both interest and principal, so that the balance reaches zero at the end.
Gradually. As the balance falls, the interest part shrinks and the principal part grows.