What is the use of Mortgage Amortization Calculator?
This calculator helps you determine your monthly mortgage payments, total interest paid, and provides a detailed amortization schedule. It is a valuable tool for homeowners and prospective buyers to plan their finances effectively. By inputting the loan amount, interest rate, and loan term, users can get a breakdown of how much goes toward principal and interest each month, along with the total cost of the loan over its duration.
Formula
Formula for Monthly Mortgage Payment:
M = P[r(1 + r)^n] / [(1 + r)^n - 1]
Where:
- M = Monthly payment
- P = Loan amount (Principal)
- r = Monthly interest rate (annual rate / 12)
- n = Total number of payments (loan term in years × 12)
How to Use This Website
To use this calculator, follow these steps:
- Enter the loan amount (principal) in the designated input box.
- Enter the annual interest rate as a percentage (e.g., 5 for 5%).
- Enter the loan term in years (e.g., 30 for a 30-year mortgage).
- Click on the "Calculate" button to view the monthly payment, total interest, and amortization schedule.
- Use the "Clear" button to reset the inputs and start a new calculation.
Calculator
Frequently Asked Questions
1. What is a Mortgage Amortization Schedule?
A mortgage amortization schedule is a table that shows the breakdown of each monthly payment into principal and interest components. It also provides the remaining balance after each payment.
2. Why is amortization important?
Amortization helps borrowers understand how their payments are distributed over the loan term and aids in financial planning by showing total interest costs and the remaining balance.