Mortgage Amortization Calculator
Detailed mortgage amortization schedule with principal and interest breakdown
Loan Specifications
Principal amount to be paid off during amortization
Total term: 360 months
Nominal annual interest rate
How often interest is compounded on the principal
Additional monthly payment directly applied to principal
Deadline for the first mortgage installment
Payment Summary
Loan Details
Payment Breakdown
Amortization Schedule
| Year End | Principal Paid | Interest Paid | Balance |
|---|---|---|---|
| Invalid Date | $120,000 | $73,987.305 | $0 |
Showing first 10 years. Click "Show All" to see complete schedule.
Amortization Formula
Monthly Payment Formula
M = P × [r(1+r)^n] / [(1+r)^n - 1]
M = Monthly payment
P = Principal loan amount
r = Monthly interest rate
n = Total number of payments
Interest vs Principal
Interest Payment: Remaining Balance × Monthly Interest Rate
Principal Payment: Monthly Payment - Interest Payment
New Balance: Previous Balance - Principal Payment
Early payments are mostly interest; later payments are mostly principal.
Understanding Amortization
Equal Payments
Same payment amount throughout loan term
Interest Decreases
Interest portion decreases over time
Principal Increases
Principal portion increases over time
Builds Equity
Each payment builds home ownership
Extra Payment Benefits
Reduces total interest paid significantly
Shortens loan term by years
Builds equity faster
Provides financial security
Even $50 extra can save thousands
Understanding Mortgage Amortization
How Amortization Works
Amortization is the process of paying off a loan through equal monthly payments over time. Each payment covers both interest and principal, but the proportion changes throughout the loan term.
Payment Structure
- •Early Years: Payments are mostly interest, little principal
- •Middle Years: Interest and principal roughly equal
- •Later Years: Payments are mostly principal, little interest
Compounding Frequency Impact
Monthly Compounding
Most common for US mortgages, interest calculated monthly
Daily Compounding
Interest calculated daily, slightly higher effective rate
Annual Compounding
Interest calculated yearly, lowest effective rate
Tip: Extra payments go directly to principal, reducing the balance on which future interest is calculated. This creates a compounding effect of savings.