1. What is a Mortgage Calculator With Amortization Table?

Definition: This calculator computes your monthly mortgage payment and shows a detailed breakdown of each payment over the life of your loan.

Purpose: It helps borrowers understand how much of each payment goes toward principal vs. interest and track loan payoff progress.

2. How Does the Calculator Work?

The calculator uses these formulas:

Where:

• \( I_k \) — Interest portion of payment for period k
• \( P_k \) — Principal portion of payment for period k
• \( B_k \) — Remaining balance after period k
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( M \) — Fixed monthly payment amount

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

3. Importance of Amortization

Details: Understanding amortization helps you see the true cost of borrowing, plan for refinancing, and make informed prepayment decisions.

4. Using the Calculator

Tips: Enter the loan amount, annual interest rate, and loan term in years. The calculator will show your monthly payment and full amortization schedule.

5. Frequently Asked Questions (FAQ)

Q1: Why does early payment go mostly toward interest?
A: Interest is calculated on the current balance, which is highest at the beginning of the loan term.

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 a larger payment?
A: Extra amounts apply directly to principal, reducing future interest and potentially shortening the loan term.

Q4: Does this include taxes and insurance?
A: No, this calculates principal and interest only (P&I). Your actual payment may include escrow items.

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