### 30 year mortgage calculator amortization -

## How To Calculate Your Mortgage Payment: Fixed, Variable, and More

Understanding your mortgage helps you make better financial decisions. Instead of just accepting offers blindly, it’s wise to look at the numbers behind any loan—especially a significant loan like a home loan.

### Key Takeaways

- You can calculate your monthly mortgage payment by using a mortgage calculator or doing it by hand.
- You'll need to gather information about the mortgage's principal and interest rate, the length of the loan, and more.
- Before you apply for loans, review your income and determine how much you’re comfortable spending on a mortgage payment.

### Getting Started With Calculating Your Mortgage

People tend to focus on the monthly payment, but there are other important features that you can use to analyze your mortgage, such as:

- Comparing the monthly payment for several different home loans
- Figuring how much you pay in interest monthly, and over the life of the loan
- Tallying how much you actually pay off over the life of the loan, versus the principal borrowed, to see how much you actually paid extra

Use the mortgage calculator below to get a sense of what your monthly mortgage payment could end up being,

### The Inputs

Start by gathering the information needed to calculate your payments and understand other aspects of the loan. You need the details below. The letter in parentheses tells you where we’ll use these items in calculations (if you choose to calculate this yourself, but you can also use online calculators):

- The
**loan amount**(P) or principal, which is the home-purchase price plus any other charges, minus the down payment - The annual
**interest rate**(r) on the loan, but beware that this is not necessarily the APR, because the mortgage is paid monthly, not annually, and that creates a slight difference between the APR and the interest rate - The
**number of years**(t) you have to repay, also known as the "term" - The number of
**payments per year**(n), which would be 12 for monthly payments - The
**type of loan**: For example, fixed-rate, interest-only, adjustable - The
**market value**of the home - Your
**monthly income**

### Calculations for Different Loans

The calculation you use depends on the type of loan you have. Most home loans are standard fixed-rate loans. For example, standard 30-year or 15-year mortgages keep the same interest rate and monthly payment for their duration.

For these fixed loans, use the formula below to calculate the payment. Note that the carat (^) indicates that you’re raising a number to the power indicated after the carat.

**Payment = P x (r / n) x (1 + r / n)^n(t)] / (1 + r / n)^n(t) - 1**

### Example of Payment Calculation

Suppose you borrow $100,000 at 6% for 30 years, to be repaid monthly. What is the monthly payment? The monthly payment is $599.55.

Plug those numbers into the payment formula:

- {100,000 x (.06 / 12) x [1 + (.06 / 12)^12(30)]} / {[1 + (.06 / 12)^12(30)] - 1}
- (100,000 x .005 x 6.022575) / 5.022575
- 3011.288 / 5.022575 = 599.55

You can check your math with the Loan Amortization Calculator spreadsheet.

### How Much Interest Do You Pay?

Your mortgage payment is important, but you also need to know how much of it gets applied to interest each month. A portion of each monthly payment goes toward your interest cost, and the remainder pays down your loan balance. Note that you might also have taxes and insurance included in your monthly payment, but those are separate from your loan calculations.

An amortization table can show you—month-by-month—exactly what happens with each payment. You can create amortization tables by hand, or use a free online calculator and spreadsheet to do the job for you. Take a look at how much total interest you pay over the life of your loan. With that information, you can decide whether you want to save money by:

- Borrowing less (by choosing a less expensive home or making a larger down payment)
- Paying extra each month
- Finding a lower interest rate
- Choosing a shorter-term loan (15 years instead of 30 years, for example) to speed up your debt repayment

Shorter-term loans like 15-year mortgages often have lower rates than 30-year loans. Although you would have a bigger monthly payment with a 15-year mortgage, you would spend less on interest.

### Interest-Only Loan Payment Calculation Formula

Interest-only loans are much easier to calculate. Unfortunately, you don’t pay down the loan with each required payment, but you can typically pay extra each month if you want to reduce your debt.

*Example:* Suppose you borrow $100,000 at 6% using an interest-only loan with monthly payments. What is the payment? The payment is $500.

Loan Payment = Amount x (Interest Rate / 12)

**Loan payment = $100,000 x (.06 / 12) = $500**

Check your math with the Interest Only Calculator on Google Sheets.

In the example above, the interest-only payment is $500, and it will remain the same until:

- You make additional payments, above and beyond the required minimum payment. Doing so will reduce your loan balance, but your required payment might not change right away.
- After a certain number of years, you’re required to start making amortizing payments to pay down the debt.
- Your loan may require a balloon payment to pay off the loan entirely.

### Adjustable-Rate Mortgage Payment Calculation

Adjustable-rate mortgages (ARMs) feature interest rates that can change, resulting in a new monthly payment. To calculate that payment:

- Determine how many months or payments are left.
- Create a new amortization schedule for the length of time remaining (see how to do that).
- Use the outstanding loan balance as the new loan amount.
- Enter the new (or future) interest rate.

*Example:* You have a hybrid-ARM loan balance of $100,000, and there are ten years left on the loan. Your interest rate is about to adjust to 5%. What will the monthly payment be? The payment will be $1,060.66.

### Know How Much You Own (Equity)

It’s crucial to understand how much of your home you actually own. Of course, you own the home—but until it’s paid off, your lender has a lien on the property, so it’s not yours free-and-clear. The value that you own, known as your "home equity," is the home’s market value minus any outstanding loan balance.

You might want to calculate your equity for several reasons.

**Your loan-to-value (LTV) ratio**is critical, because lenders look for a minimum ratio before approving loans. If you want to refinance or figure out how big your down payment needs to be on your next home, you need to know the LTV ratio.**Your net worth**is based on how much of your home you actually own. Having a one million-dollar home doesn’t do you much good if you owe $999,000 on the property.**You can borrow against your home**using second mortgages and home equity lines of credit (HELOCs). Lenders often prefer an LTV below 80% to approve a loan, but some lenders go higher.

### Can You Afford the Loan?

Lenders tend to offer you the largest loan that they’ll approve you for by using their standards for an acceptable debt-to-income ratio. However, you don’t need to take the full amount—and it’s often a good idea to borrow less than the maximum available.

Before you apply for loans or visit houses, review your income and your typical monthly expenses to determine how much you’re comfortable spending on a mortgage payment. Once you know that number, you can start talking to lenders and looking at debt-to-income ratios. If you do it the other way around (ignoring your expenses and basing your housing payment solely on your income), you might start shopping for more expensive homes than you can afford, which affects your lifestyle and leaves you vulnerable to surprises.

It’s safest to buy less and enjoy some wiggle room each month. Struggling to keep up with payments is stressful and risky, and it prevents you from saving for other goals.

### Frequently Asked Questions (FAQs)

### What is a fixed-rate mortgage?

A fixed-rate mortgage is a home loan that has the same interest rate for the life of the loan. This means your monthly principal and interest payment will stay the same. The proportion of how much of your payment goes toward interest and principal will change each month due to amortization. Each month, a little more of your payment goes toward principal and a little less goes toward interest.

### What is an interest-only mortgage?

An interest-only mortgage is a home loan that allows you to only pay the interest for the first several years you have the mortgage. After that period, you'll need to pay principal and interest, which means your payments will be significantly higher. You can make principal payments during the interest-only period, but you're not required to.

## What is mortgage amortization?

### Table of contents

What is an amortized loan?How to calculate an amortized loanAmortization rates for fixed-rate mortgages Amortization rates for variable rate mortgagesAmortization calculator### What is an amortized loan?

An amortized loan is a type of loan that involves making every payment according to the original loan amortization schedule and paying it off by the end of the term. The term “amortization” itself simply refers to the amount of principal and interest paid each month over the course of the loan term.

Near the beginning of the loan, most payments are applied toward interest. Over time, the balance shifts so that by the end of the term, nearly the entire payment is applied to paying off the principle of the loan. You’ll find this model of repayment in home loans, auto loans, and personal loans from banks.

### How to calculate an amortized loan

The interest on an amortized loan is based on the most recent ending balance of the loan. As you make payments, the interest amount decreases and the principal portion increases. The way to calculate this is to multiply the balance of the loan amount by the interest rate in the current period (or divide an annual interest rate by 12 to find a monthly rate). Subtract the interest due for the period from the total monthly payment, and you’ll arrive at the dollar amount of principal to pay for the period.

The principal is applied to the balance of the loan. Subtract the principal paid in the period from the current balance of the loan, and you’ll see the new outstanding balance. This outstanding balance is what sets the interest for the next period. Amortized loans are structured differently, however, for fixed-rate and variable-rate mortgages.

### Amortization rates for fixed-rate mortgages

As the name suggests, a fixed-rate mortgage doesn’t fluctuate with the market. In other words, the interest rate on a fixed-rate mortgage doesn’t move regardless of whether interest rates are rising or falling. The only variable is the amount of principal and interest you’ll pay each month.

At the beginning of the loan, that balance is weighted toward interest, and over time, you’ll pay more toward the principal. The interest rates for 15-year loans are lower than those for 30-year loans, so combined with a shorter timeline, borrowers will pay less in interest overall and build equity faster. The difference is that monthly payments will be larger than with a 30-year mortgage.

### Amortization rates for variable rate mortgages

On an adjustable-rate mortgage, or ARM, your interest rate can go up or down at the end of what’s called a “teaser period,” or how long your interest rate stays fixed at the beginning of the loan. (Think of teaser periods with __credit cards__, in which you avoid raises in rates for a specific period.) The teaser period for a mortgage is typically five, seven, or 10 years.

Some ARMs include payment caps, which limit your monthly payment increase at the time of each adjustment, generally to a percentage of the prior payment. For instance, with a 6.5% payment cap, a payment of $100 could increase to no more than $106.5 in the first adjustment period, and $113 in the second.

When you look at loan repayment terms on ARMS, a 5/1 ARM would mean the initial rate would stay fixed for the first five years and change once a year after that. If the mortgage had caps of 2/2/5, that would mean the payment could go up 2% on the first adjustment and 2% on each subsequent adjustment, but not over 5% over the life of the loan. It is common for ARMs to have terms of 30 years.

### Amortization calculator

Though many amortized loans are expressed in tables for reference, you can use an amortization calculator to see how much money you would pay in principal and interest over time. For instance, if you were to calculate a fixed-rate mortgage on a $225,000 home with a mortgage term of 30 years at 2.7% interest per year, you would pay $912.59 in monthly payments and total interest of $103,534.07 over the life of the loan.

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### How much more do you have to **pay off** your home loan?

Want to know how far you’ve come through the mortgage process? Or know how many years are ahead of you? This simple calculator will help you to evaluate your progress through the years of your home loan.

By taking into account the** amount you borrowed**, the **interest rate** and **your repayments**, you can work out the total amount you will repay for your loan and the remaining balance after a certain number of years.

Knowing how much of your mortgage you have paid off can be a valuable asset, as the home equity you have built up could be used to finance renovations, or even to finance the purchase of another property. **Talk to your Mortgage Choice broker today to explore how you can harness your equity. **

### Our current interest rates

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**Comparison Rate**

Credit criteria, conditions, fees and charges apply. Subject to suitability. The comparison rates in this table are based on a loan amount of $150,000 and a term of 25 years. Warning: This Comparison Rate applies only to the example or examples given. Different amounts and terms will result in different Comparison Rates. Costs such as redraw fees or early repayment fees, and costs savings such as fee waivers, are not included in the Comparison Rate but may influence the cost of the loan.

### Refinancing guide

Considering refinancing? Our guide explains the reasons, costs and steps involved in refinancing your home loan.

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The results from these calculators are an approximate guide only and do not constitute specialist advice. The calculations used should not be relied upon for the purposes of entering into any legal or financial commitments.

Disclaimer - Borrowing power: The borrowing amount is a guide only. Loan repayments are based on the lowest interest rate (either standard variable or 3-year fixed rate, owner occupier) from our lender panel over a repayment period of 30 years. Rates and repayments are indicative only and subject to change. The results from this calculator are an approximate guide only and do not constitute specialist advice. The calculations used should not be relied upon for the purposes of entering into any legal or financial commitments.

Disclaimer - Loan Repayments: The lowest interest rate from our lender panel is either standard variable or 3-year fixed for an owner-occupier. Rates and repayments are indicative only and subject to change. The results from this calculator are an approximate guide only and do not constitute specialist advice. The calculations used should not be relied upon for the purposes of entering into any legal or financial commitments.

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## Amortization Schedule Calculator

Amortization is paying off a debt over time in equal installments. Part of each payment goes toward the loan principal, and part goes toward interest. With mortgage loan amortization, the amount going toward principal starts out small, and gradually grows larger month by month. Meanwhile, the amount going toward interest declines month by month for fixed-rate loans.

Your amortization schedule shows how much money you pay in principal and interest over time. Use this calculator to see how those payments break down over your loan term.

### What is an amortization schedule?

A mortgage amortization schedule is a table that lists each regular payment on a mortgage over time. A portion of each payment is applied toward the principal balance and interest, and the mortgage loan amortization schedule details how much will go toward each component of your mortgage payment.

Initially, most of your payment goes toward the interest rather than the principal. The loan amortization schedule will show as the term of your loan progresses, a larger share of your payment goes toward paying down the principal until the loan is paid in full at the end of your term.

### How do you calculate amortization?

An amortization schedule calculator shows:- How much principal and interest are paid in any particular payment.
- How much total principal and interest have been paid at a specified date.
- How much principal you owe on the mortgage at a specified date.
- How much time you will chop off the end of the mortgage by making one or more extra payments.

- Determine how much principal you owe now, or will owe at a future date.
- Determine how much extra you would need to pay every month to repay the mortgage in, say, 22 years instead of 30 years.
- See how much interest you have paid over the life of the mortgage, or during a particular year, though this may vary based on when the lender receives your payments.
- Figure out how much equity you have.

### How do I calculate monthly mortgage payments?

Here’s a formula to calculate your monthly payments manually: M= P[r(1+r)^n/((1+r)^n)-1)]**M = the total monthly mortgage payment.****P = the principal loan amount.****r = your monthly interest rate.**Lenders provide you an annual rate so you’ll need to divide that figure by 12 (the number of months in a year) to get the monthly rate. If your interest rate is 5 percent, your monthly rate would be 0.004167 (0.05/12=0.004167).**n = number of payments over the loan’s lifetime.**Multiply the number of years in your loan term by 12 (the number of months in a year) to get the number of payments for your loan. For example, a 30-year fixed mortgage would have 360 payments (30x12=360).

### Want to learn more? Check out these resources:

## Mortgage Amortization: Learn How Your Mortgage Is Paid Off Over Time

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### How Mortgage Amortization Works

- While your mortgage payment stays the same each month
- The composition changes over time as the outstanding balance falls
- Early on in the loan term most of the payment is interest
- And late in the term it’s mostly principal that you’re paying back

Ever wonder how your home loan goes from a pain in your neck to real estate free and clear?

Well, it all has to do with a magical little thing called “mortgage amortization,” which is defined as the reduction of debt by regular payments of interest and principal sufficient to pay off a loan by maturity.

In simple terms, it’s the way your mortgage payments are distributed on a monthly basis, dictating how much interest and principal will be paid off each month for the duration of the loan term.

### Jump to amortization topics:

– Principal vs. Interest

– Fully Amortized vs. Interest-Only

– Mortgage Amortization Example

– How to Shorten the Amortization Period

– How to Pay Off My Mortgage in 10 Years or Less

Understanding the way your mortgage amortizes is a great way to understand how different loan programs work.

And an amortization calculator will show you how your balance is paid off on a monthly or yearly basis.

It will also show you how much interest you’ll pay over the life of your loan, assuming you hold it to maturity.

Trust me, you’ll be surprised at how much of your payment goes toward interest as opposed to the principal balance.

Of course, there’s not much you can do about it if you don’t buy your home in cash, or choose a shorter loan term, such as the 15-year fixed mortgage.

Unfortunately, with home prices so high and home affordability so low, most home buyers (and especially first-time home buyers) tend to go with 30-year mortgages.

These are the default choice, whether we’re talking about conventional loans or FHA loans.

There’s nothing inherently wrong with that, but it does mean you’ll pay a lot of interest for a very long time.

Still, if you can get a better return for your money elsewhere, or if you have higher-APR debt like credit cards, auto loans, student loans, and so forth, it can still be a great choice.

### How Mortgage Payments Work: Early Payments Go Toward Interest

- This is a real amortization schedule for a 30-year fixed-rate home loan
- You’ll notice that the bulk of the monthly payment is interest
- Over time the interest portion will go down and the principal portion will rise
- Thanks to a smaller outstanding loan balance

Pictured above is an actual “amortization schedule” from an active mortgage about five months into a 30-year fixed-rate mortgage. That means it’s got another 355 months to go. Almost there!

Your mortgage lender or loan servicer may provide an amortization schedule calculator that you can use to see how your loan will be paid off.

Or you can use any number of free loan amortization calculators found online. It can be helpful to make decisions about your mortgage going forward.

As you can see in the table above, the principal and interest payment is $1611.64 per month. It doesn’t change because the loan is fixed, but the ratio of interest to principal does.

Early on, more than $1,000 of that $1,611.64 is going toward interest each month, with just over $500 going toward the principal balance.

You want those principal payments to go up because they actually pay down your loan balance. The rest just makes your lender (and loan servicer) rich.

The good news is as you pay down your mortgage, the total amount of interest due will decrease with each payment because it’s computed based on the remaining balance, which goes down as principal is paid back.

And as that happens, the amount of principal rises because a fixed mortgage has a fixed payment too. So it’s a win win. Sadly, it doesn’t happen all that quickly.

During the first half of a 30-year fixed-rate loan, most of the monthly payment goes to paying down interest, with very little principal actually paid off.

Toward the last 15 years of the loan, you will begin to pay off a greater amount of principal, until the monthly payment is largely principal and very little interest.

This is important to note because homeowners who continuously refinance their mortgages will find themselves back in the interest-paying portion of the loan every time they start anew, meaning they’ll pay a lot more interest over the years.

Each time you refinance, assuming you refinance into the same type of loan, you’re essentially extending the loan amortization period of the mortgage.

And the longer the term, the more you’ll pay in interest. If you don’t believe me, grab a mortgage amortization calculator and you’ll see.

Tip: If you have already paid down your mortgage for several years, but want to refinance to take advantage of low mortgage rates, consider refinancing to a shorter-term mortgage, such as a 15-year or 10-year fixed mortgage.

This is one simple way to avoid “resetting the clock” and stay on track if your goal is to pay off your mortgage. Use a refinance calculator to determine the best approach when doing your loan comparison analysis.

### Fully Amortized vs. Interest-Only

If you’ve come across the term “fully-amortized,” you might be wondering what it means.

Simply put, if a borrower makes regular monthly payments that will pay off the loan in full by the end of the loan term, they are considered fully-amortizing payments.

Often, you’ll hear that a mortgage is amortized over 30 years, meaning the lender expects payments for 360 months to pay off the loan by maturity.

This relates to the fact that most mortgages have 30-year terms, such as the popular 30-year fixed.

To better illustrate, let’s consider interest-only mortgage payments, which are often an option on home loans.

If your lender gives you the choice to pay just the interest portion of the mortgage payment each month, it would not be considered a fully-amortized payment.

Why? Because if you continued to make those payments each month, they wouldn’t pay off the loan.

In fact, an interest-only payment would do absolutely nothing to pay off the principal balance of the loan. It would only tackle the monthly interest expense.

If you had a loan with an outstanding balance of $300,000 and solely made interest-only payments for five years, you would still owe $300,000 after those 60 months were up.

So for a loan to be fully amortized, you need to make both a principal and interest payment each month.

### Let’s look at a mortgage amortization example:

Loan amount: $100,000

Interest rate: 6.5%

Monthly mortgage payment: $632.07

Say you’ve got a $100,000 loan amount set at 6.5% on a 30-year fixed mortgage. The total principal and interest payment is $632.07 per month.

As noted, this amount will not change from the start date of your mortgage to the very end.

If you break down the very first monthly mortgage payment, $541.67 goes toward interest and $90.40 goes toward principal.

The outstanding balance is reduced by $90.40, so next month you’ll only owe interest on a balance of $99,909.60.

When it comes time to make your second monthly mortgage payment, interest is calculated on the new, lower balance.

The payment would remain the same, but $541.18 would go toward interest and $90.89 would go to principal. This interest reduction would continue until your monthly payments were going primarily to principal.

In fact, the 360th payment in our example contributes just $3.41 to interest and a whopping $628.66 to principal. A payoff calculator will illustrate this.

### Consider Larger Mortgage Payments to Shorten Amortization Period

- If you want to pay your loan off faster and reduce your interest expense
- You can make larger payments each month to accomplish both those things
- The excess amount will go toward the outstanding loan balance
- Reducing the amount of interest due on subsequent payments

Okay, so now you have a better idea of how your mortgage amortizes or gets paid off. Your next move will be to determine if paying your mortgage down faster is a good idea.

In the example above, you’ll pay a total of $227,545.20 over the 30-year term, with $127,545.20 going toward interest. Ouch!

If you make slightly larger payments, say $700 each month instead (consistently), your mortgage term will be cut by roughly seven years (23 years total) and you’ll only pay $76,448.10 in interest.

That will save you about $50,000 over the life of the loan…not bad.

If saving money is your goal, you can also make an extra payment here and there if you so choose, which can make a major dent in your loan balance.

It’s actually pretty incredible how far a little extra goes in the mortgage world.

Conversely, you might be happy as a clam to pay your mortgage down slowly, seeing that mortgage rates are so low relative to other types of loans and/or investment options.

For example, if you can pay a rate of 4% on your home loan for 30 years and get a double-digit return in the stock market, what’s the rush?

This is why some home buyers opt for adjustable-rate mortgages with no intention of ever paying off their loans, knowing they can do better elsewhere.

### How Do I Pay Off My Mortgage in 10 Years?

- If you want to pay off your home loan faster
- Say in 10-15 years as opposed to 30
- You simply need to figure out what the monthly payment would be
- Based on the number of months in which you want it paid off

Now let’s look at some specific ways to greatly speed up the loan amortization process, assuming you don’t have other credit card debt, auto loans, personal loans, and the like.

I’m providing ballpark estimates here, so do your diligence with a mortgage calculator to determine what works for your particular loan amount and mortgage rate. Results may vary.

**How to pay off your 30-year mortgage in 20 years:**

Depending on your mortgage rate, a monthly payment of around 1.2X to maybe 1.3X should whittle your loan term down from 360 months to around 240 months, and save a ton of interest in the process.

Just find out what the 20-year payment would be and you could make 240 monthly payments instead of 360. Then plug it into a mortgage payoff calculator to see the savings.

**How to pay off a 30-year mortgage in 15 years:**

If you want to cut your mortgage term in half, simply figure out what the 15-year payment would be, then make that payment each month until the mortgage is paid in full. In general, this is about 1.5X the 30-year payment.

For example, a $350,000 mortgage set at 5% would require a monthly payment of $1878.88 in order to be paid off in 30 years.

If you made the 15-year payment of $2767.78 instead, the mortgage would be paid off in 180 months, or 15 years.

**How to pay off a 30-year mortgage in 10 years:**

If you want to pay off the mortgage in just 10 years, the rule of thumb is to double your monthly mortgage payment. It’s not exact, but it’s very close.

Using our example from above, you’d need a monthly payment of $3712.29 to extinguish the loan in 120 months. Those with relatively small loan amounts might have no trouble doing this.

At the same time, it might be a big ask for someone with a jumbo mortgage who is struggling with affordability as it is.

**How to pay off a 30-year mortgage in 5 years:**

If you’re really impatient and want to pay off the mortgage in five years, you basically have to make anywhere from 3.5-4X the monthly payment. That’s $6,604.93 in our example to pay it all off in 60 months.

**How to pay off a 15-year mortgage in 10 years:**

If you have a 15-year fixed, but want to pay it down in 10 years, you can generally make a monthly payment about 1.5X and it’ll be paid off in 120 months instead of 180.

**How to pay off a 15-year mortgage in 7 years:**

To cut your 15-year mortgage term in half (or a bit more), doubling mortgage payments would pretty much lower the term to seven years or less, perhaps closer to 6.5 years.

**How to pay off a 15-year mortgage in 5 years:**

For those with a 15-year mortgage who want to triple the payoff speed, a monthly payment roughly 2.5X will get the job done.

You can do this same formula for basically any mortgage term and desired payoff duration.

So if you have a certain payoff date in mind, figure out the number of months first, then plug in that monthly payment into a loan calculator to get the length of the mortgage down.

I should mention that mortgage rates are lower on shorter-duration home loans, so you may actually save more money by choosing a shorter loan term to begin with.

However, you do get the added bonus of flexibility if you have a longer-term mortgage and making extra principal payments is simply voluntary.

This is why a mortgage refinance from a 30-year mortgage to a 15-year fixed mortgage can be so powerful.

Not only is the term shorter, but the interest rate is lower too. Sure, the payment amount will rise, but you’ll own your home a lot sooner and pay way less interest.

Take the time to learn about biweekly mortgage payments as well if you’re into saving money.

These are payments made every two weeks, which equates to 26 total payments a year, or 13 monthly mortgage payments.

That extra payment each year goes toward principal, lowering the total amount of interest paid and decreasing the term of the loan.

Every prospective homeowner should also take a look at an amortization schedule and/or a mortgage calculator to determine exactly how payments apply in their particular situation.

Simply knowing your interest rate is not enough to make an educated decision on a loan product, let alone buying real estate.

You’ll see how much impact even an eighth of a percentage point can make, which illustrates the importance of having an excellent credit score so you can obtain the lowest interest rate possible.

Read more:30-year vs. 15-year mortgages.

### 30 year mortgage calculator amortization -

## Mortgage Amortization Calculator

Although your monthly payment will be the same each month, the amount going toward principal will increase each month and the amount going toward interest will decrease each month as you pay down your balance. The calculator’s amortization schedule (click above to open it)will show you the details.

Most people need a mortgage to buy a home. The median U.S. home costs more than $300,000, and few people have that much extra cash lying around. What’s more, mortgage rates are so low that even people with plenty of savings may prefer to borrow for a home purchase to maintain the financial security of having well-funded emergency savings and retirement accounts. And, of course, there’s the tax deduction for mortgage interest.

With our mortgage amortization calculator, you can see your estimated monthly payment and how the total cost of your mortgage will change depending on your interest rate. Try out different inputs for home price, down payment, interest rate, and loan term to understand the long-term impact of a mortgage before you sign the paperwork. This calculator can help you whether you’re buying a home or refinancing.

A mortgage amortization calculator will show you the long-term cost of a fixed-rate mortgage by compiling the total interest that you will pay over the life of your mortgage. It also itemizes the principal and interest of each monthly payment to show you how your mortgage payments are structured.

### Mortgage Amortization Calculator Results Explained

**Monthly payment:** See what you will pay for principal and interest each month. Keep in mind that there are many other monthly expenses associated with homeownership: homeowners insurance, property taxes, utilities, maintenance, and repairs. Depending on your neighborhood and property type, you may also pay homeowners association fees. If you put down less than 20%, then your lender may require you to pay mortgage insurance premiums.

**Total principal paid:** The mortgage size (the amount that you borrow) and the total principal paid are the same thing. This amount is equal to the home’s purchase price minus your down payment, plus any closing costs that you finance.

**Total interest paid:** The biggest part of your total borrowing cost if you keep your loan for the full term (usually 15 or 30 years) is your total interest paid. You can add your mortgage closing costs and mortgage insurance premiums (if any) to total interest paid to understand the true long-term cost of borrowing.

**Estimated final payment date: **You don’t really need a calculator to give yourself the estimated payoff date of your loan. Just add 15 or 30 years to the date when you start paying your loan. If you make your first payment on March 1, 2021, then your 30-year mortgage will be paid off by March 1, 2051. But we’ll save you the math and let the calculator tell you the estimated payoff date.

**Running total of interest: **When you expand the amortization schedule that the calculator creates, you’ll see a column showing how much interest you’ve paid by each point in your mortgage. It might be $5,000 by March 1, 2022; $9,500 by March 1, 2023; and so on.

**Total remaining balance:** Expanding the amortization schedule will also show you how close you are to paying off your loan principal each month. After one year, you might still owe $196,000 on a $200,000 mortgage; after two years, $192,000; after 10 years, $155,000; and so on.

### How to Speed Up Mortgage Amortization

Are you horrified by the total interest cost that the calculator shows you? That’s normal. It’s one thing to know that your monthly payment is $900, and another to see that you’re going to pay $123,000 in interest over the next 30 years. Fortunately, you have several options to speed up mortgage amortization—to pay off your loan faster and save money.

**Choose a shorter loan term:** If you select a shorter amortization period for your mortgage—for example, 15 years instead of 30—then you will save considerably on interest over the life of the loan and own your home sooner. Also, interest rates on shorter-term loans are often lower compared to longer-term loans. A shorter-term mortgage may be a good option if you can handle higher monthly payments without hardship for the entire loan term. If not, there’s another option.

**Make extra principal payments:** To keep your mortgage term the same and avoid tying yourself to higher monthly payments, you can make one extra principal payment per year in the amount of your normal monthly payment. You’ll shave about five years off a 30-year mortgage this way. If you have a financial hardship one year, you can skip the extra payment. If you get a large bonus or tax refund one year, you can double up on the extra payment. You’ll have more control—but less accountability—if you choose this strategy for speeding up mortgage amortization.

### Understanding Mortgage Amortization

A mortgage amortization schedule is calculated using the loan amount, loan term, and interest rate. If you know these three things, you can use Excel’s PMT function to calculate your monthly payment. For a 30-year, $150,000 mortgage with a 3.5% interest rate, the date to enter in an Excel cell would be =PMT(3.5%/12,360,150000). The result will be $673.57.

Once you know your monthly payment, you can calculate how much of your monthly payment is going toward principal and how much is going toward interest using this formula:

**Principal Payment = Total Monthly Payment - [Outstanding Loan Balance × (Interest Rate/12 Months)]**

Multiply $150,000 by 3.5%/12 to get $437.50. That’s your interest payment for your first monthly payment.

Subtract that from your monthly payment to get your principal payment: $236.07.

Check your math: $437.50 + $236.07 = $673.57, the total monthly payment that we calculated above.

Next month, your loan balance will be $236.07 smaller because that’s how much of your payment goes toward principal. To see how much of next month’s monthly payment goes toward principal and interest, repeat the calculation with a principal amount of $149,763.93, the result of subtracting $236.07 from $150,000.

This time, your interest payment will be $436.81, and your principal payment will be $236.76.

Just repeat this process another 358 times and you’ll have yourself an amortization table for a 30-year loan.

Now you know why using a mortgage amortization calculator is so much easier. But some people may have an easier time wrapping their head around mortgage amortization by understanding how the math behind the calculator works.

### How much more do you have to **pay off** your home loan?

Want to know how far you’ve come through the mortgage process? Or know how many years are ahead of you? This simple calculator will help you to evaluate your progress through the years of your home loan.

By taking into account the** amount you borrowed**, the **interest rate** and **your repayments**, you can work out the total amount you will repay for your loan and the remaining balance after a certain number of years.

Knowing how much of your mortgage you have paid off can be a valuable asset, as the home equity you have built up could be used to finance renovations, or even to finance the purchase of another property. **Talk to your Mortgage Choice broker today to explore how you can harness your equity. **

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Credit criteria, conditions, fees and charges apply. Subject to suitability. The comparison rates in this table are based on a loan amount of $150,000 and a term of 25 years. Warning: This Comparison Rate applies only to the example or examples given. Different amounts and terms will result in different Comparison Rates. Costs such as redraw fees or early repayment fees, and costs savings such as fee waivers, are not included in the Comparison Rate but may influence the cost of the loan.

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The results from these calculators are an approximate guide only and do not constitute specialist advice. The calculations used should not be relied upon for the purposes of entering into any legal or financial commitments.

Disclaimer - Borrowing power: The borrowing amount is a guide only. Loan repayments are based on the lowest interest rate (either standard variable or 3-year fixed rate, owner occupier) from our lender panel over a repayment period of 30 years. Rates and repayments are indicative only and subject to change. The results from this calculator are an approximate guide only and do not constitute specialist advice. The calculations used should not be relied upon for the purposes of entering into any legal or financial commitments.

Disclaimer - Loan Repayments: The lowest interest rate from our lender panel is either standard variable or 3-year fixed for an owner-occupier. Rates and repayments are indicative only and subject to change. The results from this calculator are an approximate guide only and do not constitute specialist advice. The calculations used should not be relied upon for the purposes of entering into any legal or financial commitments.

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## SBA 7(a) Loan Calculator

**Business Loans: Breaking Down the Basics**

**What is amortization?**

Like most accounting terms, amortization is a big, scary sounding word with a surprisingly easy definition. Simply put, amortization is the process of spreading out your loan payments over time.

When you look at an amortization calendar (also called an amortization table), you’ll see what your principal payment amount will be each month of your loan, what your interest payment will be each month, and how your total loan balance will change month after month.

**What is the difference between principal and interest?**

The principal amount of your loan is the total amount of money that you’ve borrowed. Interest, on the other hand, is the fee you pay to borrow that amount. It’s a set percentage of the loan amount that you agreed upon when you took the loan.

Interest will continue to compound on your loan until the entire principal balance is paid off. For each payment that you make toward your loan, a portion will go toward your principal and a portion will go toward your interest.

**What is an SBA 7(a) loan?**

The SBA in SBA 7(a) stands for the Small Business Administration, a federal department that helps encourage and subsidize new small businesses. The SBA 7a loan is one of the most popular commercial loans offered by the SBA, and is geared toward new borrowers and those borrowers who may be considered “weak” in their financial position.

If you qualify for an SBA 7(a) loan, the SBA will partially fund your loan through a private lender. The thought is that this incentivizes lenders to fund borrowers who they might not want to take the risk on otherwise.

**Who qualifies for an SBA 7(a) loan?**

As with all loans, eligibility is ultimately decided on a case by case basis. However, there are some specifics you’ll definitely need to prove. These include:

An intention to do business in the United States

A demonstrated need for funding

A legitimate business proposal

A previous effort to fund your business through personal assets or other financial resources

In addition, interested SBA 7(a) borrowers will have to show that they are interested in opening a small business, as defined by SBA’s size standards.

**What is the maximum SBA 7(a) loan amount?**

The most that you can borrow for your small business with an SBA 7(a) loan is $5 million. If you borrow the maximum, the SBA will be funding $3,750,000 of the loan and your private lender will cover the rest.

**Is a down payment required for an SBA 7(a) loan?**

Yes. There is a required down payment of 10% of your total loan amount for an SBA 7(a) loan, however your individual lender may require more.

**How can an SBA 7(a) loan be used?**

Your lender will fill you in on exactly how you can and cannot use your SBA 7(a) loan, but generally the loan is available for a wide variety of small business-related expenses. These include:

Start-up costs

Buying a business

Commercial real estate

Working capital

Equipment and supplies

Land

Repairing existing capital

Refinancing debt

Some lenders are more strict than others about how SBA 7(a) loans can be used. Be sure to ask a lot of questions when choosing a lender, including questions about whether the loan can fund each individual purpose you intend to put it towards.

Learn more about uses for SBA 7(a) loans here.

**How does SBA7a.loan’s Loan Calculator work?**

Math, of course! We’ll determine your monthly payment and amortization schedule based on the total amount that you’re borrowing, the interest rate that you agreed upon for your loan, and the term of your loan.

In addition to showing you your monthly payment, the calculator will also break down for you how much of each payment will go toward principal and interest, and how your balance will change with each payment.

**How does a commercial loan differ from a traditional loan?**

When you get a traditional loan—say, a loan to buy a house—the loan covers the purchase of the property only. A commercial loan, on the other hand, funds more than just your basic real estate. You can use it to purchase supplies, build up your inventory, and cover your start-up costs, among other things. Differences also exist in how your loan is appraised and approved.

**Where can I get a free SBA 7(a) loan quote?**

We’re committed to make it easy for individuals to find out how much they might be approved to borrow with an SBA 7(a) loan. Get a quote here, answer a few questions, and we’ll not only give you an estimate, we’ll also point you in the direction of qualified lenders. It’s free to use and there is no obligation required.

**How can I speed up the SBA 7(a) approval process?**

In a hurry? Look for either an SBA Preferred Lender or an SBA Express Lender. Both have the power to streamline the loan process and get you the funding that you need faster. Check out our post on “How to Get Your SBA Loan Approved Faster” for all the details that you need to know.

We’re here to help you every step of the way. If you have questions related to the SBA 7(a) loan or the SBA loan approval process, we invite you to reach out to SBA7a.loans so that we can help. We’re happy to answer any questions that you may have.

## Amortization Schedule Calculator

Amortization is paying off a debt over time in equal installments. Part of each payment goes toward the loan principal, and part goes toward interest. With mortgage loan amortization, the amount going toward principal starts out small, and gradually grows larger month by month. Meanwhile, the amount going toward interest declines month by month for fixed-rate loans.

Your amortization schedule shows how much money you pay in principal and interest over time. Use this calculator to see how those payments break down over your loan term.

### What is an amortization schedule?

A mortgage amortization schedule is a table that lists each regular payment on a mortgage over time. A portion of each payment is applied toward the principal balance and interest, and the mortgage loan amortization schedule details how much will go toward each component of your mortgage payment.

Initially, most of your payment goes toward the interest rather than the principal. The loan amortization schedule will show as the term of your loan progresses, a larger share of your payment goes toward paying down the principal until the loan is paid in full at the end of your term.

### How do you calculate amortization?

An amortization schedule calculator shows:- How much principal and interest are paid in any particular payment.
- How much total principal and interest have been paid at a specified date.
- How much principal you owe on the mortgage at a specified date.
- How much time you will chop off the end of the mortgage by making one or more extra payments.

- Determine how much principal you owe now, or will owe at a future date.
- Determine how much extra you would need to pay every month to repay the mortgage in, say, 22 years instead of 30 years.
- See how much interest you have paid over the life of the mortgage, or during a particular year, though this may vary based on when the lender receives your payments.
- Figure out how much equity you have.

### How do I calculate monthly mortgage payments?

Here’s a formula to calculate your monthly payments manually: M= P[r(1+r)^n/((1+r)^n)-1)]**M = the total monthly mortgage payment.****P = the principal loan amount.****r = your monthly interest rate.**Lenders provide you an annual rate so you’ll need to divide that figure by 12 (the number of months in a year) to get the monthly rate. If your interest rate is 5 percent, your monthly rate would be 0.004167 (0.05/12=0.004167).**n = number of payments over the loan’s lifetime.**Multiply the number of years in your loan term by 12 (the number of months in a year) to get the number of payments for your loan. For example, a 30-year fixed mortgage would have 360 payments (30x12=360).

### Want to learn more? Check out these resources:

## Amortization Calculator

An amortization calculator is useful for understanding the long-term cost of a fixed-rate mortgage because it shows the total principal that you’ll pay over the life of the loan. It’s also helpful for understanding how your mortgage payments are structured.

If you’ve ever wondered how much of your monthly payment will go toward interest and how much will go toward principal, an amortization calculator is an easy way to get that information.

### Key Takeaways

- When you have a fully amortizing loan like a mortgage or a car loan, you will pay the same amount every month. The lender will apply a gradually smaller part of your payment toward interest and a gradually larger part of your payment toward principal until the loan is paid off.
- Amortization calculators make it easy to see how a loan’s monthly payments are divided into interest and principal.
- You can use a regular calculator or a spreadsheet to do your own amortization math, but an amortization calculator will provide a faster result.

### Estimate Your Monthly Amortization Payment

When you amortize a loan, you pay it off gradually through periodic payments of interest and principal. A loan that is self-amortizing will be fully paid off when you make the last periodic payment.

The periodic payments will be your monthly principal and interest payments. Each monthly payment will be the same, but the amount that goes toward interest will gradually decline each month, while the amount that goes toward principal will gradually increase each month. The easiest way to estimate your monthly amortization payment is with an amortization calculator.

### Amortization Calculator Results Explained

To use an amortization calculator, you’ll need these inputs:

**Loan amount:** How much do you plan to borrow, or how much have you already borrowed?

**Loan term:** How many years do you have to repay the loan?

**Interest rate:** What is the lender charging you annually for the loan?

With these inputs, the amortization calculator will output your monthly payment.

For example, if your mortgage amount is $150,000, your loan term is 30 years, and your interest rate is 3.5%, then your monthly payment will be $673.57. The amortization schedule will also show you that your total interest over 30 years will be $92,484 ($92,484.13, to be precise, as the amortization schedule will show you).

For this and other additional detail, you’ll want to dig into the amortization schedule.

### What Is an Amortization Schedule?

An amortization schedule gives you a complete breakdown of every monthly payment, showing how much goes toward principal and how much goes toward interest. It can also show the total interest that you will have paid at a given point during the life of the loan and what your principal balance will be at any point.

Using the same $150,000 loan example from above, an amortization schedule will show you that your first monthly payment will consist of $236.07 in principal and $437.50 in interest. Ten years later, your payment will be $334.82 in principal and $338.74 in interest. Your final monthly payment after 30 years will have less than $2 going toward interest, with the remainder paying off the last of your principal balance.

### How Can You Calculate an Amortization Schedule on Your Own?

A loan amortization schedule is calculated using the loan amount, loan term, and interest rate. If you know these three things, you can use Excel’s PMT function to calculate your monthly payment. In our example above, the information to enter in an Excel cell would be =PMT(3.5%/12,360,150000). The result will be $673.57.

Once you know your monthly payment, you can calculate how much of your monthly payment is going toward principal and how much is going toward interest using this formula:

**Principal Payment = Total Monthly Payment - [Outstanding Loan Balance × (Interest Rate/12 Months)]**

Multiply $150,000 by 3.5%/12 to get $437.50. That’s your interest payment for your first monthly payment. Subtract that from your monthly payment to get your principal payment: $236.07.

Next month, your loan balance will be $236.07 smaller, so you’ll repeat the calculation with a principal amount of $149,763.93. This time, your interest payment will be $436.81, and your principal payment will be $236.76.

Just repeat this another 358 times, and you’ll have yourself an amortization table for a 30-year loan. Now you know why using a calculator is so much easier. But it’s nice to understand how the math behind the calculator works.

You can create an amortization schedule for an adjustable-rate mortgage (ARM), but it involves guesswork. If you have a 5/1 ARM, the amortization schedule for the first five years is easy to calculate because the rate is fixed for the first five years. After that, the rate will adjust once per year. Your loan terms say how much your rate can increase each year and the highest that your rate can go, as well as the lowest rate.

### How to Calculate Amortization with an Extra Payment

Sometimes people want to pay down their loans faster to save money on interest. Even if you have a low interest rate, you might decide to make an extra payment toward your principal when you can afford it because you don’t want to carry any debt.

If you wanted to add $50 to every monthly payment, you could use the formula above to calculate a new amortization schedule and see how much sooner you would pay off your loan and how much less interest you would owe. In this example, putting an extra $50 per month toward your mortgage would increase the monthly payment to $723.57.

Your interest payment in month 1 would still be $437.50, but your principal payment would be $286.07. Your month 2 loan balance would then be $149,713.93, and your second month’s interest payment would be $436.67. You will already have saved 14 cents in interest! No, that’s not very exciting—but what is exciting is that, if you kept it up until your loan were paid off, your total interest would amount to $80,545.98 instead of $92,484.13. You would also be debt free almost 3½ years sooner.

### Mortgage Amortization Isn’t the Only Kind

We’ve talked a lot about mortgage amortization so far, because that’s what people usually think about when they hear the word “amortization.” But a mortgage is not the only type of loan that can amortize. Auto loans, home equity loans, student loans, and personal loans also amortize. They have fixed monthly payments and a predetermined payoff date.

Which types of loans do not amortize? If you can reborrow money after you pay it back and don’t have to pay your balance in full by a particular date, then you have a non-amortizing loan. Credit cards and lines of credit are examples of non-amortizing loans.

### How Can Using an Amortization Calculator Help Me?

Our amortization calculator can help you do many things:

- See how much principal you will owe at any future date during your loan term.
- See how much interest you’ve paid on your loan so far.
- See how much interest you’ll pay if you keep the loan until the end of its term.
- Figure out how much equity you should have, if you’re second-guessing your monthly loan statement.
- See how much interest you’ll pay over the entire term of a loan, as well as the impact of choosing a longer or shorter loan term or getting a higher or lower interest rate.

### The Bottom Line

An amortization calculator offers a convenient way to see the effect of different loan options. By changing the inputs—interest rate, loan term, amount borrowed—you can see what your monthly payment will be, how much of each payment will go toward principal and interest, and what your long-term interest costs will be. This type of calculator works for any loan with fixed monthly payments and defined end date, whether it’s a student loan, auto loan, or fixed-rate mortgage.

When you apply for a mortgage to buy a home, lenders will closely review your finances, asking you to share bank statements, pay stubs, and other documents. Here are the main things they review to determine how much you can borrow:

**Your income:**How much money you bring in—from work, investments, and other sources—is one of the main factors that will determine what size mortgage you can get. Lenders may check not only your income for the current year, but also for past years to see how steady your income has been.**Debt:**This is the total amount you owe to credit cards, car payments, child support, college loans, and other monthly debts. Lenders look closely at applicants who owe a large amount of debt, since it means there will be less funds to put toward a mortgage payment, even if their income is substantial.

Lenders will compare your income and debt in a figure known as your debt-to-income ratio. Your debt-to-income (DTI) ratio is the percentage of gross income (before taxes are taken out) that goes toward your debt.

To calculate your DTI ratio, divide your ongoing monthly debt payments by your monthly income. As a general rule, to qualify for a mortgage, your DTI ratio should not exceed 36% of your gross monthly income.

Lenders will also review other aspects of your finances, including the following:

**Credit score:**Also called a FICO score, a credit score is a numerical rating summing up how well you’ve paid back past debts. It’s based on whether you’ve paid your credit card bills on time, how much of your total credit limit you’re using, the length of your credit history, and other factors. A credit score can range from 300 to 850; generally a high score means you'll have little trouble getting a home loan with great terms and interest rates.

For an instant estimate of what you can afford to pay for a house, you can plug your income, down payment, home location, and other information into a home affordability calculator.

### : 30 year mortgage calculator amortization

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30 year mortgage calculator amortization |

## Mortgage Amortization Calculator

Although your monthly payment will be the same each month, the amount going toward principal will increase each month and the amount going toward interest will decrease each month as you pay down your balance. The calculator’s amortization schedule (click above to open it)will show you the details.

Most people need a mortgage to buy a home. The median U.S. home costs more than $300,000, and few people have that much extra cash lying around. What’s more, mortgage rates are so low that even people with plenty of savings may prefer to borrow for a home purchase to maintain the financial payday loans with savings account near me of having well-funded emergency savings and retirement accounts. And, of course, there’s the tax deduction for mortgage interest.

With our mortgage amortization calculator, you can see your estimated monthly payment and how the total cost of your mortgage will change depending on your interest rate. Try out different inputs for home price, down payment, interest rate, and loan term to understand the long-term impact of a mortgage before you sign the paperwork. This calculator can help you whether you’re buying a home or refinancing.

A mortgage amortization calculator will show you the long-term cost of a fixed-rate mortgage by compiling the total interest that you will pay over the life of your mortgage. It also itemizes the principal and interest of each monthly payment to show you how your mortgage payments are structured.

### Mortgage Amortization Calculator Results Explained

**Monthly payment:** See what you will pay for principal and interest each month. Keep in mind that there are many other monthly expenses associated with homeownership: homeowners insurance, property taxes, utilities, maintenance, and repairs. Depending on your neighborhood and property type, you may also pay homeowners association fees. If you put down less than 20%, then your lender may require you to pay mortgage insurance premiums.

**Total principal paid:** The mortgage size (the amount that you borrow) and the total principal paid are the same thing. This amount is equal to the home’s purchase price minus your down payment, plus any closing costs that you finance.

**Total interest paid:** The biggest part of your total borrowing cost if you keep your loan for the full term (usually 15 or 30 years) is your total interest paid. You can add your mortgage closing costs and mortgage insurance premiums (if any) to total interest paid to understand the true long-term cost of borrowing.

**Estimated final payment date: **You don’t really need a calculator to give yourself the estimated payoff date of your loan. Just add 15 or 30 years to the date when you start paying your loan. If you make your first payment on March 1, 2021, then your 30-year mortgage will be paid off by March 1, 2051. But we’ll save you the math and let the calculator tell you the estimated payoff date.

**Running total of interest: **When you expand the amortization schedule that the calculator creates, you’ll see a column showing how much interest you’ve paid by each point in your mortgage. It might be $5,000 by March 1, 2022; $9,500 by March 1, 2023; and so on.

**Total remaining balance:** Expanding the amortization schedule will also show you how close you are to paying off your loan principal each month. After one year, you might still owe $196,000 on a $200,000 mortgage; after two years, $192,000; after 10 years, $155,000; and so on.

### How to Speed Up Mortgage Amortization

Are you horrified by the total interest cost that the calculator shows you? That’s normal. It’s one thing to know that your monthly payment is $900, and another to see that you’re going to pay $123,000 in interest over the next 30 years. Fortunately, you have several options to speed up mortgage amortization—to pay off your loan faster and save money.

**Choose a shorter loan term:** If you select a shorter amortization period for your mortgage—for example, 15 30 year mortgage calculator amortization instead of 30—then you will save considerably on 30 year mortgage calculator amortization over the life of the loan and own your home sooner. Also, interest rates on shorter-term loans are often lower compared to longer-term loans. A shorter-term mortgage may be a good option if you can handle higher monthly payments without hardship for the entire loan term. If not, there’s another option.

**Make extra principal payments:** To keep your mortgage term the same and avoid tying yourself to higher monthly payments, you can make one extra principal payment per year **30 year mortgage calculator amortization** the amount of your normal monthly payment. You’ll shave about five years off a 30-year mortgage this way. If you have a financial hardship one year, you can skip the extra payment. If you get a large bonus or tax refund one year, you can double up on the extra payment. You’ll have more control—but less accountability—if you choose this strategy for speeding up mortgage amortization.

### Understanding Mortgage Amortization

A mortgage amortization schedule is calculated using the loan amount, loan term, and interest rate. If you know these three things, you can use Excel’s PMT function to calculate your monthly payment. For a 30-year, $150,000 mortgage with a 3.5% interest rate, the date to enter in an Excel cell would be =PMT(3.5%/12,360,150000). The result will be $673.57.

Once you know your monthly payment, you can calculate how much of your monthly payment is going toward principal and how much is going toward interest using this formula:

**Principal Payment = Total Monthly Payment - [Outstanding Loan Balance × (Interest Rate/12 Months)]**

Multiply $150,000 by 3.5%/12 to get $437.50. That’s your interest payment for your first monthly payment.

Subtract that from your monthly payment to get your principal payment: $236.07.

Check your math: $437.50 + $236.07 = $673.57, the total monthly payment that we calculated above.

Next month, your loan balance will be $236.07 smaller because that’s how much of your payment goes toward principal. To see how much of next month’s monthly payment goes toward principal and interest, repeat the calculation with a principal amount of $149,763.93, the result of subtracting $236.07 from $150,000.

This time, your interest payment will be $436.81, and your principal payment will be $236.76.

Just repeat this process another 358 times and you’ll have yourself an amortization table for a 30-year loan.

Now you know why using a mortgage amortization calculator is so much easier. But some people may have an easier time wrapping their head around mortgage amortization by understanding how the math behind the calculator works.

## Mortgage Balloon Payment Calculator

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The name of your potential lender. This field is not required but may help if you have printed out several loan scenarios.

The sale price for your property. (NOT the amount of money you plan to borrow.)

The amount of money you plan to put as a down payment on your property.

The annual percentage rate you will pay for this loan.

The length of your balloon mortgage or loan. Your balance or 'Balloon Payment Amount' will be due at this time. Also choose whether 'Length of Balloon Period' is years or months.

The monthly payment and interest are calculated as if the mortgage or loan were being paid over this length. Also choose whether 'Length of Amortized Interest' is years or months.

The additional amount you will pay each month (over the required 'Monthly Payment' amount) to pay down the principal on your loan.

The number of points (or percentage of the loan amount) you'll be paying to close this loan. Check 'Roll into Loan' if the cost of the loan points is being financed and included in the 'Loan Amount'.

Should be checked if the 'Points' are to be included in the loan as opposed to paid at closing.

Any other costs you'll be paying during the closing of your loan. These might be costs like the appraisal, property taxes, property insurance, title insurance, realtor fees, etc. Check 'Roll into Loan' if your closing costs (not to include loan points) is being financed and included in the 'Loan Amount'.

Should be checked if the 'Other Closing Costs' are to be included in the loan as opposed to paid at closing.

'Principal' + 'Interest' + 'Additional Principal' (where applicable) to be paid each month. Actual payment could include escrow for insurance and property taxes plus private mortgage insurance (PMI).

'Sale Price' - 'Down Payment' + 'Points' (if rolled into loan) + 'Other Closing Costs' (if rolled into loan).

Total amount of interest you will pay over 'Length of Loan'.

Total amount of principal + 30 year mortgage calculator amortization you will pay over 'Length of Loan'.

Amount of time until the loan is paid off.

The amount due at the end of 'Length of Balloon Period'.

The number of payments you will make to pay off the loan.

The amount of money you will pay each year for this loan.

The points percentage applied to the amount you borrow gives the dollar amount the loan points will cost.

Total cost of this property when you include the 'Sale Price', 'Points Amount', 'Other Closing Costs' and the 'Total Interest' to be paid on the mortgage.

When checked, a section will appear below the calculator showing the complete amortization table.

LoanAmount * (Rate / 12) / (1 - (1 pay kohls bill in store (Rate / 12))^{-Months})**$854.36** = $142,500.00 * (0.0600 / 12) / (1 - (1 + (0.0600 / 12))^{-360})

Sale Price - Down Payment + Points Amount (if rolled into loan) + Other Closing Costs (if rolled into loan)**$142,500.00** = $150,000.00 - $7,500.00 + $0.00 + $0.00

**$57,002.34** = Previous Month's Total Interest + (Month's Beginning Balance * (Rate / 12)) each month until Balance = 0

Loan Amount + Total Interest**$199,502.34** = $142,500.00 + $57,002.34

**7 Yrs** = (Previous Number of Monthly Payments + 1 each month until Balance = 0) / 12 [to convert to years and months]

Loan Balance after Length of Balloon Period + Interest**$128,590.46** = $127,950.71 + $639.75

**84** = Previous Number of Monthly Payments + 1 each month until Balance = 0

Monthly Payment * 12**$10,252.32** = $854.36 * 12

(Sale Price - Down Payment) * (Points / 100)**$2,137.50** = ($150,000.00 - $7,500.00) * (1.5000 / 100)

Sale Price + Points Amount + Other Closing Costs + Total Interest**$213,639.84** = $150,000.00 + $2,137.50 + $4,500.00 + $57,002.34

## How To Calculate Your Mortgage Payment: Fixed, Variable, and More

Understanding your mortgage helps you make better financial decisions. Instead of just accepting offers blindly, it’s wise to look at the numbers behind any loan—especially a significant loan like a home loan.

### Key Takeaways

- You can calculate your monthly mortgage payment by using a mortgage calculator or doing it by hand.
- You'll need to gather information about the mortgage's principal and interest rate, the length of the loan, and more.
- Before you apply for loans, review your income and determine how much you’re comfortable spending on a mortgage payment.

### Getting Started With Calculating Your Mortgage

People tend to focus on the monthly payment, but there are other important features that you can use to analyze your mortgage, such as:

- Comparing the monthly payment for several different home loans
- Figuring how much you pay in interest monthly, and over the life of the loan
- Tallying how much you actually pay off over the life of the loan, versus the principal borrowed, to see how much you actually paid extra

Use the mortgage calculator below to get a sense of what your monthly mortgage payment could end up being,

### The Inputs

Start by gathering the information needed to calculate your payments and understand other aspects of the loan. You need the details below. The letter in parentheses tells you where we’ll use these items in calculations (if you choose to calculate this yourself, but you can also use online calculators):

- The
**loan amount**(P) or principal, which is the home-purchase price plus any other charges, minus the down payment - The annual
**interest rate**(r) on the loan, but beware that this is not necessarily the APR, because the mortgage is paid monthly, not annually, and that creates a slight difference between the APR and the interest rate - The
**number of years**(t) you have to repay, also known as the "term" - The number of
**payments per year**(n), which would be 12 for monthly payments - The
**type of loan**: For example, fixed-rate, interest-only, adjustable - The
**market value**of the home - Your
**monthly income**

### Calculations for Different Loans

The calculation you use depends on the type of loan you have. Most home loans are 30 year mortgage calculator amortization fixed-rate loans. For example, standard 30-year or 15-year mortgages keep the same interest rate and monthly payment for their duration.

For these fixed loans, use the formula below to calculate the payment. Note that the carat (^) indicates that you’re raising a number to the power indicated after the carat.

**Payment = P x (r / n) x (1 + r / n)^n(t)] / (1 + r / n)^n(t) - 1**

### Example of Payment Calculation

Suppose you borrow $100,000 at 6% for 30 years, to be repaid monthly. What is the monthly payment? The monthly payment is $599.55.

Plug those numbers into the payment formula:

- {100,000 x (.06 / 12) x [1 + (.06 / 12)^12(30)]} / {[1 + (.06 / 12)^12(30)] - 1}
- (100,000 x .005 x 6.022575) / 5.022575
- 3011.288 / 5.022575 = 599.55

You can check your math with the Loan Amortization Calculator spreadsheet.

### How Much Interest Do You Pay? chase business account routing number Your mortgage payment is important, but you also need to know how much of it gets applied to interest each month. A portion of each monthly payment goes toward your interest cost, and the remainder pays down your loan balance. Note that you might also have taxes and insurance included in your monthly payment, but those are separate from your loan calculations.

An amortization table can show you—month-by-month—exactly what happens with each payment. You can create amortization tables by hand, or use a free online calculator and spreadsheet to do the job for you. Take a look at how much total interest you pay over the life of your loan. With that information, you can decide whether you want to save money by:

- Borrowing less (by choosing a less expensive home or making a larger down payment)
- Paying extra each month
- Finding a lower interest rate
- Choosing a shorter-term loan (15 years instead of 30 years, for example) to speed up your debt repayment

Shorter-term loans like 15-year mortgages often have lower rates than 30-year loans. Although you would have a bigger monthly payment with a 15-year mortgage, you would spend less on interest.

### Interest-Only Loan Payment Calculation Formula

Interest-only loans are much easier to calculate. Unfortunately, you don’t pay down the loan with each required payment, but you can typically pay extra each month if you want to reduce your debt.

*Example:* Suppose you borrow $100,000 at 6% using an interest-only loan with monthly payments. What is the payment? The payment is $500.

Loan Payment = Amount x (Interest Rate / 12)

**Loan payment = $100,000 x (.06 / 12) = $500**

Check your math with the Interest Only Calculator on Google Sheets.

In the example above, the interest-only payment is $500, and it will remain the same until:

- You make additional payments, above and beyond the required minimum payment. Doing so will reduce your loan balance, but your required payment might not change right away.
- After a certain number of years, you’re required to start making amortizing payments to pay down the debt.
- Your loan may require a balloon payment to pay off the loan entirely.

### Adjustable-Rate Mortgage Payment Calculation

Adjustable-rate mortgages (ARMs) feature interest rates that can change, resulting in a new monthly payment. To calculate that payment:

- Determine how many months or payments are left.
- Create a new amortization schedule for the length of time remaining (see how to do that).
- Use the outstanding loan balance as the new loan amount.
- Enter the new (or future) interest rate.

*Example:* You have a hybrid-ARM loan balance of $100,000, and there are ten years left on the loan. Your interest rate is about to adjust to 5%. What will the monthly payment be? The payment will be $1,060.66.

### Know How Much You Own (Equity)

It’s crucial to understand how much of your home you actually own. Of course, you own the home—but until it’s paid off, your lender has a lien on the property, so it’s not yours free-and-clear. The value that you own, known as your "home equity," is the home’s market value minus any outstanding loan do wells fargo cashiers checks expire.

You might want to calculate your equity for several reasons.

**Your loan-to-value (LTV) ratio**is critical, because lenders look for a minimum ratio before approving loans. If you want to refinance or figure out how big your down payment needs to be on your next home, you need to know the LTV ratio.**Your net worth**is based on how much of your home you actually own. Having a one million-dollar home doesn’t do you much good if you owe $999,000 on the property.**You can borrow against your home**using second mortgages and home equity lines of credit (HELOCs). Lenders often prefer an LTV below 80% to approve a loan, but some lenders go higher.

### Can You Afford the Loan?

Lenders tend to offer you the largest loan that they’ll approve you for by using their standards for an acceptable debt-to-income ratio. However, you don’t need to take the full amount—and it’s often a good idea to borrow less than the maximum available.

Before you apply for loans or visit houses, review your income and your typical monthly expenses to determine how much you’re comfortable spending on a mortgage payment. Once you know that number, you can start talking to lenders and looking at debt-to-income ratios. If you do it the other way around (ignoring your expenses and basing your housing payment solely on your income), you might start shopping for more expensive homes than you can afford, which affects your lifestyle and leaves you vulnerable to surprises.

It’s safest to buy less and enjoy some wiggle room each month. Struggling to keep up with payments is stressful and risky, and it prevents you from saving for other goals.

### Frequently Asked Questions (FAQs)

### What is a fixed-rate mortgage?

A fixed-rate mortgage is a home loan that has the same interest rate for the life of the loan. This means your monthly principal and interest payment will stay the same. The proportion of how much of your payment goes toward interest and principal will change each month due to amortization. Each month, a little more of your payment goes toward principal and a little less goes toward interest.

### What is an interest-only mortgage?

An interest-only mortgage is a home loan that allows you to only pay the interest for the first several years you have the mortgage. After that period, you'll need to pay principal and interest, which means your payments will be significantly higher. You can make principal payments during the interest-only period, but you're not required to.

## Mortgage Amortization: Learn How Your Mortgage Is Paid Off Over Time

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### How Mortgage Amortization Works

- While your mortgage payment stays the same each month
- The composition changes over time as the outstanding balance falls
- Early on in the loan term most of the payment is interest
- And late in the term 30 year mortgage calculator amortization mostly principal that you’re paying back

Ever wonder how your home loan goes from a pain in your neck to real estate free and clear?

Well, it all has to do with a magical little thing called “mortgage amortization,” which is defined as the reduction of debt by regular payments of interest and principal sufficient to pay off a loan by maturity.

In simple terms, it’s the way your mortgage payments are distributed on a monthly basis, dictating how much interest and principal will be paid off each month for the duration of the loan term.

### Jump to amortization topics:

– Principal vs. Interest

– Fully Amortized vs. Interest-Only

– Mortgage Amortization Example

– How to Shorten the Amortization Period

– How to Pay Off My Mortgage in 10 Years or 30 year mortgage calculator amortization the way your mortgage amortizes is a great way to understand how different loan programs work.

And an amortization calculator will show you how your balance is paid off on a monthly or yearly basis.

It will also show you how much interest you’ll pay over the life of your loan, assuming you hold it to maturity.

Trust me, you’ll be surprised at how much of your payment goes toward interest as opposed to the principal balance.

Of course, there’s not much you can do about it if you don’t buy your home in cash, online ebook lending library choose a shorter loan term, such as the 15-year fixed mortgage.

Unfortunately, with home prices so high and home affordability so low, most home buyers (and especially first-time home buyers) tend to go with 30-year mortgages.

These are the default choice, whether we’re talking about conventional loans or FHA loans.

There’s nothing inherently wrong with that, but it does mean you’ll pay a lot of interest for a very long time.

Still, if you can get a better return for your money elsewhere, or if you have higher-APR debt like credit cards, auto loans, student loans, and so forth, it can still be a great choice.

### How Mortgage Payments Work: Early Payments Go Toward Interest

- This is a real amortization schedule for a 30-year fixed-rate home loan
- You’ll notice that the bulk of the monthly payment is interest
- Over time the interest portion will go down and the principal portion will rise
- Thanks to a smaller outstanding loan balance

Pictured above is an actual “amortization schedule” from an active mortgage about five months into a 30-year fixed-rate mortgage. That means it’s got another 355 months to go. Almost there!

Your mortgage lender or loan servicer may provide an amortization schedule calculator that you can use to see how your loan will be paid off.

Or you can use any number of free loan amortization calculators found online. It can be helpful to make decisions about your mortgage going forward.

As you can see in *30 year mortgage calculator amortization* table above, the principal and interest payment is $1611.64 per month. It doesn’t change because the loan is fixed, but the ratio of interest to principal does.

Early on, more than $1,000 of that $1,611.64 is going toward interest each month, with just over $500 going toward the principal balance.

You want those principal payments to go up because they actually pay down your loan balance. The rest just makes your lender (and loan servicer) rich.

The good news is as you pay down your mortgage, the total amount of interest due will decrease with each payment because it’s computed based on the remaining balance, which goes down as principal is paid back.

And as that happens, the amount of principal rises because a fixed mortgage has a fixed payment too. So it’s a win win. Sadly, it doesn’t happen all that quickly.

During the first half of a 30-year fixed-rate loan, most of the monthly payment goes to paying down interest, with very little principal actually paid off.

Toward the last 15 years of the loan, you will begin to pay off a greater amount of principal, until the monthly payment is largely principal and very little interest.

This is important to note because homeowners who continuously refinance their mortgages will find themselves back in the interest-paying portion of the loan every time they start anew, meaning they’ll pay a lot more interest over the years.

Each time you refinance, assuming you refinance into the same type of loan, you’re essentially extending the loan amortization period of the mortgage.

And the longer the term, the more you’ll pay in interest. If you don’t believe me, grab a mortgage amortization calculator and you’ll see.

Tip: If you have already paid down your mortgage for several years, but want to refinance to take advantage of low mortgage rates, consider refinancing to a shorter-term mortgage, such as a 15-year or 10-year fixed mortgage.

This is one simple way to avoid “resetting the clock” and stay on track if your goal is to pay off your mortgage. Use a refinance calculator to determine the best approach when doing your loan comparison analysis.

### Fully Amortized vs. Interest-Only

If you’ve come across the term “fully-amortized,” you might be wondering what it means.

Simply put, if a borrower makes regular monthly payments that will pay off the loan in full by the end of the loan term, they are considered fully-amortizing payments.

Often, you’ll hear that a mortgage is amortized over 30 years, meaning the lender expects payments for 360 months to pay off the loan by maturity.

This relates to the fact that most mortgages have 30-year terms, such as the popular 30-year fixed.

To better illustrate, let’s consider interest-only mortgage payments, which are often an option on home loans.

If your lender gives you the choice to pay just the interest portion of the mortgage payment each month, it would not be considered a fully-amortized payment.

Why? Because if you continued to make those payments each month, they wouldn’t pay off the loan.

In fact, an interest-only payment would do absolutely nothing to pay off the principal balance of the loan. It would only tackle the monthly interest expense.

If you had a loan with an outstanding balance of $300,000 and solely made interest-only payments for five years, you would still owe $300,000 after those 60 months were up.

So for a loan to be fully amortized, you need to make both a principal and interest payment each month.

### Let’s look at a mortgage amortization example:

Loan amount: $100,000

Interest rate: 6.5%

Monthly mortgage payment: $632.07

Say you’ve got a $100,000 loan amount set at 6.5% on a 30-year fixed mortgage. The total principal and interest payment is $632.07 per month.

As noted, this amount will not change from the start date of your mortgage to the very end.

If you break down the very first monthly mortgage payment, $541.67 goes toward interest and $90.40 goes toward principal.

The outstanding balance is reduced by $90.40, so next month you’ll only owe interest on a balance of $99,909.60.

When it comes time to make your second monthly mortgage payment, interest is calculated on the new, lower balance.

The payment would remain the same, but $541.18 would go toward interest best buy canada credit card application $90.89 would go to principal. This interest reduction would continue until your monthly payments were going primarily to principal.

In fact, the 360th payment in our example contributes just $3.41 to interest and a whopping $628.66 to principal. A payoff calculator will illustrate this.

### Consider Larger Mortgage Payments to Shorten Amortization Period

- If you want to pay your loan off faster and reduce your interest expense
- You can make larger payments each month to accomplish both those things
- The excess amount will go toward the outstanding loan balance
- Reducing the amount of interest due on subsequent payments

Okay, so now you have a better idea of how your mortgage amortizes or gets paid off. Your next move will be to determine if paying your mortgage down faster is a good idea.

In the example above, you’ll pay a total of $227,545.20 over the 30-year term, with $127,545.20 going toward interest. Ouch!

If you make slightly larger payments, say $700 each month instead (consistently), your mortgage term will be cut by roughly seven years (23 years total) and you’ll only pay $76,448.10 in interest.

That will save you about $50,000 over the life of the loan…not bad.

If saving money is your goal, you can also make an extra payment here and there if you so choose, which can make a major dent in your loan balance.

It’s actually pretty incredible how far a little extra goes in the mortgage world.

Conversely, you might be happy as a clam to pay your mortgage down slowly, seeing that mortgage rates are so low relative to other types of loans and/or investment options.

For example, if you can pay a rate of 4% on your home loan for 30 years and get a double-digit return in the stock market, what’s the rush?

This is why some home buyers opt for adjustable-rate mortgages with no intention of ever paying off their loans, knowing they can do better elsewhere.

### How Do I Pay Off My Mortgage in 10 Years?

- If you want to pay off your home loan faster
- Say in 10-15 years as opposed to 30
- You simply need to figure out what the monthly payment would be
- Based on the number of months in which you want it paid off

Now let’s look at some specific ways to greatly speed up the loan **30 year mortgage calculator amortization** process, assuming you don’t have other credit card debt, auto loans, personal loans, and the like.

I’m providing ballpark estimates here, so do your diligence with a mortgage calculator to determine what works for your particular loan amount and mortgage rate. Results may vary.

**How to pay off your 30-year mortgage in 20 years:**

Depending on your mortgage rate, a monthly payment of around 1.2X to maybe 1.3X should whittle your loan term down from 360 months to around 240 months, and save a ton of interest in the process.

Just find out what the 20-year payment would be and you could make 240 monthly payments instead of 360. Then plug it into a mortgage payoff calculator to see the savings.

**How to pay off a 30-year mortgage in 15 years:**

If you want to cut your mortgage term in half, simply figure out what the 15-year payment would be, then make that payment each month until the mortgage is paid in full. In general, this is about 1.5X the 30-year payment.

For example, a $350,000 mortgage set at 5% would require a monthly payment of $1878.88 in order to be paid off in 30 years.

If walmart online customer service telephone number made the 15-year payment of $2767.78 instead, the mortgage would be paid off in 180 months, or 15 years.

**How to pay off a 30-year mortgage in 10 years:**

If you want to pay off the mortgage in just 10 years, the rule of thumb is to double your monthly mortgage payment. It’s not exact, but it’s very close.

Using our example from above, you’d need a monthly payment of $3712.29 to extinguish the loan in 120 months. Those with relatively small loan amounts might have no trouble doing this.

At the same time, it might be a big ask for someone with a jumbo mortgage who is struggling with affordability as it is.

**How to pay off a 30-year mortgage in 5 years:**

If you’re really impatient and want to pay off the mortgage in five years, you basically have to make anywhere from 3.5-4X the monthly payment. That’s $6,604.93 in our example to pay it all off in 60 months.

**How to pay off a 15-year mortgage in 10 years:**

If you have a 15-year fixed, but want to pay it down in 10 years, you can generally make a monthly payment about 1.5X and it’ll be paid off in 120 months instead of 180.

**How to pay off a 15-year mortgage in 7 years:**

To cut your 15-year mortgage term in half (or a bit more), doubling mortgage payments would pretty much lower the term to seven years or less, perhaps closer to 6.5 years.

**How to pay off a 15-year mortgage in 5 years:**

For those with a 15-year mortgage who want to triple the payoff speed, a monthly payment roughly 2.5X will get the job done.

You can do this same formula for basically any mortgage term and desired payoff duration.

So if you have a certain payoff date in mind, figure out the number of months first, then plug in that monthly payment into a loan calculator to get the length of the mortgage down.

I should mention that mortgage rates are lower on shorter-duration home loans, so you may actually save more money by choosing a shorter loan term to begin with.

However, you do get the added bonus of flexibility if you have a longer-term mortgage and making extra principal payments is simply voluntary.

This is why a mortgage refinance from a 30-year mortgage to a 15-year fixed mortgage can be so powerful.

Not only is the term shorter, but the interest rate is lower too. Sure, the payment amount will rise, but you’ll own your home a lot sooner and pay way less interest.

Take the time to learn about biweekly mortgage payments as well if you’re into saving money.

These are payments made every two weeks, which equates to 26 total payments a year, or 13 monthly mortgage payments.

That extra payment each year goes toward principal, lowering the total amount of interest paid and decreasing the term of the loan.

Every prospective homeowner should also take a look at an amortization schedule and/or a mortgage calculator to determine exactly how payments apply in their particular situation.

Simply knowing your interest rate is not enough to make an educated what county is bangor michigan in on a loan product, let alone buying real estate.

You’ll see how much impact even an eighth of a percentage point can make, which illustrates the importance of having an excellent credit score so you can obtain the lowest interest rate possible.

Read more:30-year vs. 15-year mortgages.

## Amortization Schedule Calculator

Amortization is paying off a debt over time in equal installments. Part of each payment goes toward the loan principal, and part goes toward interest. With mortgage loan amortization, the amount going toward principal starts out small, and gradually grows larger month by month. Meanwhile, the amount going toward interest declines month by month for fixed-rate loans.

Your amortization schedule shows how much money you pay in principal and interest over time. Use this calculator to see how those payments break down over your loan term.

### What is an amortization schedule?

A mortgage amortization schedule is a table that lists each regular payment on a mortgage over time. A portion of each payment is applied toward the principal balance and interest, and the mortgage loan amortization schedule details how much will go toward each component of your mortgage payment.

Initially, most of your payment goes toward the interest rather than the principal. The loan amortization schedule will show as the term of your loan progresses, a larger share of your payment goes toward paying down the principal until the loan is paid in full at the end of your term.

### How do you calculate amortization?

An amortization schedule calculator shows:- How much principal and interest are paid in any particular payment.
- How much total principal and interest have been paid at a specified date.
- How much principal you owe on the mortgage at a specified date.
- How much time you will chop off the end of the mortgage by making one or more extra payments.

- Determine how much principal you owe now, or will owe at a future date.
- Determine how much extra you would need to pay every month to repay the mortgage in, say, 22 years instead of 30 years.
- See how much interest you have paid over the life of the mortgage, or during a particular year, though this may vary based on when the lender receives your payments.
- Figure out how much equity you have.

### How do I calculate monthly mortgage payments?

Here’s a formula to calculate your monthly payments manually: M= P[r(1+r)^n/((1+r)^n)-1)]**M = the total monthly mortgage payment.****P = the principal loan amount.****r = your monthly interest rate.**Lenders provide you an annual rate so you’ll need to divide that figure by 12 (the number of months in a year) to get the monthly rate. If your interest rate is 5 percent, your monthly rate would be 0.004167 (0.05/12=0.004167).**n = number of payments over the loan’s lifetime.**Multiply the number of years in your loan term by 12 (the number of months in a year) to get the number of payments for your loan. For example, a 30-year fixed mortgage would have 360 payments (30x12=360).

### Want to learn more? Check out these resources:

## SBA 7(a) Loan Calculator

**Business Loans: Breaking Down the Basics**

**What is amortization?**

Like most accounting terms, amortization is a big, scary sounding word with a surprisingly easy definition. Simply put, amortization is the process of spreading out your loan payments over time.

When you look at an amortization calendar (also called an amortization table), you’ll see what your principal payment amount will be each month of your loan, what your interest payment will be each month, and how your total loan balance will change month after month.

**What is the difference between principal and interest?**

The principal amount of your loan is the total amount of money that you’ve borrowed. Interest, on the other hand, is the fee you pay to borrow that amount. It’s a set percentage of the loan amount that you agreed upon when you took the loan.

Interest will continue to compound on your loan until the entire principal balance is paid off. For each payment that you make toward your loan, a portion will go toward your principal and a portion will go toward your interest.

**What is an SBA 7(a) loan?**

The SBA in SBA 7(a) stands for the Small Business Administration, a federal department that helps encourage and subsidize new small businesses. The SBA 7a loan is one of the most popular commercial loans offered by the SBA, and is geared toward new borrowers and those borrowers who may be considered “weak” in their financial position.

If you qualify for an SBA 7(a) loan, the SBA will partially fund your loan through a private lender. The thought is that this incentivizes lenders to fund borrowers who they might not want to take the risk on otherwise.

**Who qualifies for an SBA 7(a) loan?**

As with all loans, eligibility is ultimately decided on a case by case basis. However, there are some specifics you’ll definitely need to prove. These include:

An intention to do business in the United States

A

*30 year mortgage calculator amortization*need for fundingA legitimate business proposal

A previous effort to fund your business through personal assets or other financial resources

In addition, interested SBA 7(a) borrowers will have to show that they are interested in opening a small business, as defined by SBA’s size standards.

**What is the maximum SBA 7(a) loan amount?**

The most that you can borrow for your small business with an SBA 7(a) loan is $5 million. If you borrow the maximum, the SBA will be funding $3,750,000 of the loan and your private lender will cover the rest.

**Is a down payment required bank of america home loans jobs an SBA 7(a) loan?**

Yes. There is a required down payment of 10% of your total loan amount for an SBA 7(a) loan, however your individual lender may require more.

**How can an SBA 7(a) loan be used?**

Your lender will fill you in on exactly how you can and cannot use your SBA 7(a) loan, but generally the loan is available for a wide variety of small business-related expenses. These include:

Start-up costs

Buying a business

Commercial real estate

Working capital

Equipment and supplies

Land

Repairing existing capital

Refinancing debt

Some lenders are more strict than others about how SBA 7(a) loans can be used. Be sure to ask a lot of questions when choosing a lender, including questions about whether the loan can fund each individual purpose you intend to put it towards.

Learn more about uses for SBA 7(a) loans here.

**How does SBA7a.loan’s Loan Calculator work?**

Math, of course! We’ll determine your monthly payment and amortization schedule based on the total amount that you’re borrowing, the interest rate that you agreed upon for your loan, and the term of your loan.

In addition to showing you your monthly payment, the calculator will also break down for you how much of each payment will go toward principal and interest, and how your balance will change with each payment.

**How does a commercial loan differ from a traditional loan?**

When you get a traditional loan—say, a loan to buy a house—the loan covers the purchase of the property only. A commercial loan, on the other hand, funds more than just your basic real estate. You can use it to purchase supplies, build up your inventory, and cover your start-up costs, among other things. Differences also exist in how your loan is appraised and approved.

**Where can I get a free SBA 7(a) loan quote?**

We’re committed to make it easy for individuals to find out how much they might be approved to borrow with an SBA 7(a) loan. Get a quote here, answer a few questions, and we’ll not only give you an estimate, we’ll also point you in the direction of qualified lenders. It’s free to use and there is no obligation required.

**How can I speed up the SBA 7(a) approval process?**

In a hurry? Look for either an SBA Preferred Lender or an SBA Express Lender. Both have the power to streamline the loan process and get you the funding that you need faster. Check out our post on “How to Get Your SBA Loan Approved Faster” for all the details that you need to know.

We’re here to help you every step of the way. If you have questions related to the SBA 7(a) loan or the SBA loan approval process, we invite you to reach out to SBA7a.loans so that we can help. We’re happy to answer any questions that you may have.