1. What is a Mortgage Payment Schedule Calculator?

Definition: This calculator shows the breakdown of each monthly mortgage payment into principal and interest components, along with the remaining loan balance.

Purpose: It helps borrowers understand how their payments are applied and how the loan amortizes over time.

2. How Does the Calculator Work?

The calculator uses these formulas for each payment period:

Where:

• \( I_k \) — Interest portion for month k (USD)
• \( P_k \) — Principal portion for month k (USD)
• \( B_k \) — Remaining balance after month k (USD)
• \( r \) — Monthly interest rate (decimal)
• \( M \) — Fixed monthly payment amount (USD)

Explanation: Each payment first covers the interest due on the remaining balance, with the remainder applied to principal reduction.

3. Importance of Payment Schedule

Details: Understanding the schedule helps borrowers see how much interest they'll pay over the loan term and how extra payments can shorten the loan.

4. Using the Calculator

Tips: Enter the loan amount, annual interest rate, and loan term in years. The calculator will show the monthly payment and first 12 months of the schedule.

5. Frequently Asked Questions (FAQ)

Q1: Why does most of my early payment go to interest?
A: This is normal amortization - interest is calculated on the current balance, which is highest at the beginning.

Q2: How can I pay less interest overall?
A: Make extra principal payments or choose a shorter loan term to reduce total interest paid.

Q3: What happens if I make an extra payment?
A: Extra payments directly reduce principal, causing the loan to amortize faster.

Q4: Does this include taxes and insurance?
A: No, this shows only principal and interest. Your actual payment may include escrow items.

Q5: How accurate is this calculator?
A: It provides standard amortization calculations; actual lender calculations may vary slightly.