The amortization schedule for your mortgage loan is simply a table that shows exactly how each mortgage payment is allocated between interest and principal, including how each payment affects your mortgage balance. The schedule also shows homeowners how much mortgages cost over time, depending on the interest rate and payments made.
Create Your Own Schedule
Use our free online amortization schedule calculator below to create your own personalized amortization schedule.
Simply enter the amount of the loan, your interest rate, the length of the loan, and any expected additional monthly payment amount. When you click calculate, the form will generate an amortization schedule table that details how payments will be allocated between principal and interest and how long it will take you to pay off your loan. Experiment with different additional payment amounts and note the effect on how long it will take to pay off the mortgage.
If you plan to make extra payments, compare the table generated by the amortization calculator you received with your loan to get an idea of how much difference paying an extra amount each month can make on the length of time it will take you to get out of debt. Keep in mind that these types of online amortization schedule tools are designed to provide users with general information. They do not consider payments already made, escrow amounts, or the impact of variable interest rates.
Sample Amortization Schedule
| Month | Beginning of Month Mortgage Balance |
Mortgage Payment |
Interest | Principal | Month End Mortgage Balance |
|---|---|---|---|---|---|
| 1 | $200,000 | $1,073.64 | $833.32 | $240.32 | $199,759.68 |
| 2 | 199,759.68 | 1,073.64 | 832.33 | 241.31 | 199,518.37 |
| 3 | 199,518.37 | 1,073.64 | 831.33 | 242.31 | 199,276.06 |
| 4 | 199,276.06 | 1,073.64 | 830.31 | 243.33 | 199,032.73 |
| 5 | 199,032.73 | 1,073.64 | 829.30 | 244.34 | 198,788.39 |
The amortization table for your home loan will consist of at least six columns.
- The first column indicates the month of the mortgage term.
- The second column shows the mortgage balance as of the first day of each month.
- The third column shows the regularly scheduled payment amount. Many online calculators now give you the option to set this as weekly, bi-weekly or monthly payments.
- The fourth column indicates how much of your mortgage payment is applied to interest.
- The fifth column shows the remaining amount applied to the principal or original amount borrowed. Some amortization schedules include additional columns including a running total of interest paid and associated costs such as insurance, property tax escrow accounts, and private mortgage insurance (PMI).
- The last column shows the balance of the mortgage at the end of the month.
Understanding how your mortgage payments are allocated is important as it helps you understand the real cost of purchasing and financing a home. When you're considering how much your home will actually cost, the amount of money you pay in mortgage interest more accurately reflects your true cost of homeownership than just considering the purchase price.
Online Mortgage Schedules
It isn't unusual for people to select shorter term loans when they see the real dollar value in savings over the life of the loan spelled out in black and white on amortization comparisons. For example, if you're trying to decide between a 15 year loan and a 30 year loan, viewing project schedules may help you understand the real financial impact of the choices you make. Here are three websites that offer online calculators and amortization schedules for different mortgage scenarios that can help you assess the true cost of your mortgage options.
Early Payoff Options
Reviewing the scheduled amortization for your home loan provides a great deal of valuable information, especially if you want to pay off your mortgage loan early. When reviewing the schedule, you will notice that early in the term of your loan very little of your monthly payment goes toward the principal of your home. Instead, the bulk of your early payments go toward paying interest.
As time goes by and you make the regular installment payments on your home loan, the amount of money applied to the principal loan balance increases. If you make extra payments toward your mortgage, not only is the overall principal balance on the loan reduced more quickly, but a greater percentage of future monthly payments will go toward principal rather than interest because the actual debt amount has been reduced.
Making Informed Decisions
Choosing the right mortgage loan and how to go about paying off your existing loan are important things to consider when looking for a mortgage. Your choices can have a serious impact on your long term financial well-being.
Prior to your final decision, gather as much information as possible about the mortgage alternatives available, and use an amortization schedule to analyze each option. When you're making a major investment, such as buying a home, or trying to figure out how to proceed with paying off your mortgage, amortization schedules can be invaluable decision making tools.
