How to use Mortgage Amortization Calculator in 2022? 

A Mortgage Amortization Calculator is an incredibly beneficial tool that helps you understand the cost of your fixed-rate mortgages in the long term.

This is because it reflects the total amount of principal that an individual will be paying over the total repayment course of their loan.

Apart from this, an Amortization Mortgage Calculator is also very useful in helping you understand the structure of your mortgage expenses. 

In case you have ever thought about the exact fraction of money that goes into the interest and that goes into the principal amount of your monthly payments, a Mortgage Amortization Calculator will help you figure that out.

It will provide you with all the information with great ease. 

If you wish to dig deeper into Mortgage Calculator With Amortization, you have just stumbled upon the right post.

In this article, we are going to enlighten you on various aspects of the Amortization Mortgage Calculator. 

Let’s first start with some basics. 

What do you mean by Mortgage Amortization? 

If you are thinking about getting a mortgage, one of the most crucial aspects that you should be aware of is the associated repayment terms.

In the majority of loans available in the country, there are two different components involved. 

These include the principal amount of your loan (the amount you initially consented to repay every month) along with the amount of interest (the extra fee you need to pay for borrowing the loan amount or the principal amount). 

The ratio of the principal amount to interest is exactly what differentiates the loan repayment terms.

What are Amortized Loans? 

Amortized loans are essentially those types of loans in which each payment is made following an initial amortization schedule of the loan, and the amount is paid off once the specified period ends. 

The word “amortization”, in simple terms, stands for the total amount of principal as well as interest that is paid every month throughout the total repayment period of the loan.  

The majority of payments are committed to interest towards the outset of a loan.

The balance changes course over time, and by the time your repayment period ends, almost the whole payment has been allocated to paying down the loan principal amount.

This repayment model can be seen in not only personal loans but also house loans as well as auto loans from various banks.

Calculating the Monthly Amortization Payment | Amortization Calculator Mortgage

When amortizing a loan, an individual has to pay the amount off slowly with time through monthly payments of the loan principal amount and the associated interest. 

Once you are done making the final monthly payment on your self-amortizing loan, it is then that it will be totally paid off.

Your monthly payment is going to include your principal as well as interest amount.

Each periodic payment is going to be the same, however, the money paid toward interest will progressively decrease every month while the money paid toward the principal loan amount will gradually rise with time.

An Amortization Calculator Mortgage is the simplest way to calculate your periodic amortisation payment.

Let’s now learn more about Mortgage Calculator Amortization. 

Also read – Mortgage Calculator: How to calculate mortgage payment

Mortgage Calculator Amortization

To be able to use a Mortgage Calculator With Amortization, you will need to have the following inputs with you: 

  • Amount of loan: The exact amount of loan that you wish to borrow or the amount of loan that you have already borrowed from a bank. 
  • The repayment term of the loan: The total number of years that you have for paying back the loan amount. 
  • Rate of interest: The specified interest rate that the lender is charging you per year. 

The Mortgage Amortization Calculator is going to output your periodic loan payment with the help of the above-mentioned inputs.  


For instance, if the amount of your mortgage is 150,000 dollars with the repayment term being 30 years and the rate of interest being 3.5%, in that case, the periodic payment on your loan is going to be 673.57 dollars.

This is the amount that you will be required to pay back to the bank every month. 

Apart from this, an amortization schedule is going to reflect the total amount of interest on your loan for 30 years. In this case, it is going to be 92,484 dollars.

An amortization schedule is in fact going to display the exact amount, which is 92,484.13 dollars. 

You would want to learn more about this amortization schedule for not only this but also some other extra information. 

What is the purpose of an Amortization Schedule? 

The amortization schedules will provide you with a total breakdown of all your periodic payments.

It shows the exact amount of money that goes into the principal amount and what goes into the interest amount. 

It may also provide you with the complete interest amount that you must have paid at a particular point in time of your loan repayment term as well as the principal balance amount at any particular point. 

For the above-mentioned example of a loan of 150,000 dollars, a Mortgage Amortization Schedule Calculator will present that your initial periodic payment is going to comprise 236.07 dollars as the principal amount and 437.50 dollars as the interest amount.

After ten years, the payment is going to constitute 334.82 dollars as the principal amount and 338.74 dollars as the interest amount.

How Mortgage Calculator With Amortization Schedule Works

A mortgage amortization schedule is evaluated with the help of three simple inputs.

These include the total amount of the loan, the specified rate of interest, as well as the predetermined repayment term of the loan.

In case you are well aware of these three inputs, you can easily make use of the PMT function in Excel for calculating your periodic payment on your loan.  

In the formerly mentioned example, the details that you need to provide in the Excel cell will look like this: 

=PMT (3.5%/12,360,150000)

The mortgage amortization calculator result is going to be 673.57 dollars. 

Once you are well aware of the periodic payment of your loan, you will be able to evaluate the exact amount that comprises the principal part as well as the interest amount.

You can easily do so with the help of the following formula:

Principal Amount = Total Periodic Payment – [Outstanding Balance × (Rate of Interest/12 Months)]

Multiply 150,000 dollars (the principal amount as per the example) by 3.5%/12 (rate of interest taken: 3.5%) to receive 437.50 dollars.

Now, this is the interest amount for your initial periodic payment.

Subtract this digit from the total periodic payment and you will then have your principal amount with you, which is 236.07 dollars. 

The loan balance next month is going to be 236.07 dollars smaller. Hence, you are going to be repeating this calculation by taking the principal loan amount as 149,763.93 dollars.

In this case, the interest amount will come out to be 436.81 dollars whereas the principal loan amount is going to be 236.76 dollars. 

You will then have to repeat this just 368 times more and you will have the amortization table ready with you.

To be clear, this amortization schedule will then be applicable for your 30-year long loan.

By now, you would understand the importance of a Mortgage Amortization Calculator and how it is so much more convenient.

However, it may certainly be good to learn the logic behind this Mortgage Amortization Calculator as well. 

You can consider preparing a mortgage amortization schedule for ARM. ARM here stands for an adjustable-rate mortgage. However, this is going to involve guesswork. 

In case you have a 5/1 adjustable-rate mortgage, the schedule for the initial five years will be pretty simple to calculate as the rate remains steady for these five years.

Post that, the rate is going to be adjusted once every year.

The terms of your loan will tell you the extent to which the rate may rise every year. Apart from this, it will also specify the highest as well as the rate possible.

Amortization Mortgage Calculator with an additional Payment

Many times, an individual wish to pay off their loan amount as soon as possible to be able to save a few bucks on the interest amount.

Even with a low rate of interest, one may choose to bring about an additional payment on the principal amount whenever possible and affordable.

This is because no one is ever willing to carry any sort of debt. 

In case you planned on adding 50 dollars to all your periodic loan payments, you may use the above-mentioned formula for evaluating a fresh amortization schedule for your loan.

This will help you figure out when exactly you would pay down your loan amount along with the interest amount that you will then owe.

Considering this instance, your periodic payment will increase to 723.57 dollars in case you decide to put an additional 50 dollars every month for the mortgage.

While the interest amount for a month would continue to be the same, the principal amount would then be 286.07 dollars.

You will be saving up on a considerable amount of money that would have otherwise gone into your interest amounts.

The most exciting part however is that you are going to be debt-free nearly three and a half years sooner!

Also read – Loan Factory Reviews

Is Mortgage Amortization the only type available? 

While you have become well versed with the term mortgage amortization by now, things go way beyond that.

Most people only associate mortgage amortization when listening to this term but mortgages are not the only kind of amortization loan.

Other types of loans such as personal loans, student loans, home equity loans, and auto loans can be amortized as well.

They have a pre-specified payoff date as well as fixed periodic payments that you need to pay every month. 

So what are some loans that don’t amortize? In case you can borrow the money again after paying it all back once and there’s no mandate to pay the balance completely by a specific date, your loan is the non-amortizing kind.

Some popular examples of this type of loan include credit cards. 

Benefits of using a Mortgage Amortization Calculator 

A Mortgage amortization calculator is useful in a variety of aspects. Let’s have a look at some of these:  

  • Finding the amount of principal that you owe at a particular point in time of your loan repayment term. 
  • Find the total interest amount that you have paid back to the lender so far. 
  • Estimating the exact interest amount that you will be paying in case you maintain the loan till the end of the repayment term. 
  • Figuring out the value of capital you will need to have in case you second-guess the periodic loan statement. 
  • Finding out the interest amount that you will be paying over the total loan repayment term along with the effect of selecting a relatively short or long repayment term or having a low or high rate of interest. 

Final Words

Mortgage Amortization Calculator is a very simple and effective tool that helps you find the output of various loan choices with great ease.

All you have to do is simply change the inputs like the rate of interest, the repayment term, as well as the total amount borrowed.

This way, you will be able to see the exact amount of payment that you will be required to repay every month. 

Apart from this, a Mortgage Amortization Calculator will also show you the exact break-up of your periodic payment.

It will tell you the amount that goes into repaying your principal amount and that goes into the interest amount.

Through a Mortgage Calculator With Amortization, you will also be able to find what your interest costs are going to be in the long term. 

A Mortgage Amortization Calculator is useful for all types of loans that have fixed periodic payments as well as specified end dates. It can include fixed-rate mortgages, student loans, or auto loans. 

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