Mortgage Amortization Calculator

See exactly how your mortgage is paid off over time. Create a detailed amortization schedule, visualize the breakdown of payments between principal and interest, and discover how extra payments can significantly reduce your loan term and save you thousands of dollars in interest.

Mortgage Amortization Calculator

Visualize how your loan is paid off over time, with a detailed amortization schedule and intuitive charts. Discover the impact of extra payments on your loan term and interest savings.

Understanding Mortgage Amortization

What is Amortization?

Amortization is the process of gradually paying off a loan through regular payments that cover both principal and interest. In a typical fixed-rate mortgage, each monthly payment is divided into two parts:

  • Principal: The portion of the payment that reduces the loan balance.
  • Interest: The portion of the payment that constitutes the loan fee, calculated based on the remaining balance.

At the beginning of the loan, the majority of your monthly payment goes toward interest. Over time, as the principal balance decreases, a larger portion of each payment goes toward principal and less toward interest. This is known as amortization.

Why is an Amortization Schedule Useful?

  • Shows you exactly how each payment is applied
  • Helps you understand how much interest you pay in total
  • Allows you to see your repayment progress over time
  • Helps you plan strategies to pay off your loan faster
  • Enables you to compare different loan options to make an informed decision

The Impact of Extra Payments

Making extra payments toward the principal can have a significant impact on your loan:

  • Reduces the total term of your loan
  • Significantly decreases the total amount of interest paid
  • Accelerates equity building in your home
  • Gives you more financial flexibility in the long run
  • Doesn't need to be large to have an impact - even $100 per month can make a big difference

Smart Amortization Strategies

Here are some strategies to optimize your mortgage repayment:

Bi-weekly Payments

Instead of making 12 monthly payments per year, make 26 bi-weekly payments (half of the monthly payment). This equals one extra monthly payment per year and can reduce your 30-year mortgage by 4 to 6 years.

Round Up Payments

Simply round up your monthly payment to the next hundred. For example, if your payment is $1,450, pay $1,500 each month. This small extra amount adds up over time.

Use Windfall Gains

Dedicate a portion of tax refunds, bonuses, or inheritances to one-time principal payments. Even a few substantial payments can significantly reduce the length of your loan.

Strategic Refinancing

If rates drop, consider refinancing to a lower rate but keep the same loan term. You can also refinance from a 30-year to a 15-year loan to dramatically accelerate amortization.