A mortgage amortization calculator shows how much of your monthly mortgage payment will go toward principal and interest over the life of your loan. The loan calculator also lets you see how much you can save by prepaying some of the principal.
How to use the loan amortization calculator
With HSH.com’s mortgage payment calculator, you enter the features of your mortgage: amount of the principal loan balance, the interest rate, the home loan term, and the month and year the loan begins.
Your initial display will show you the monthly mortgage payment, total interest paid, breakout of principal and interest, and your mortgage payoff date.
Most of your mortgage loan payment will go toward interest in the early years of the loan, with a growing amount going toward the loan principal as the years go by – until finally almost all of your payment goes toward principal at the end. For instance, in the first year of a 30-year, $250,000 mortgage with a fixed 5% interest rate, $12,416.24 of your payments goes toward interest, and only $3,688.41 goes towards your principal. To see this, click on “Payment chart” and mouse over any year.
Clicking on “Amortization schedule” reveals a display table of the total principal and interest paid in each year of the mortgage and your remaining principal balance at the end of each calendar year. Clicking the “+” sign next to a year reveals a month-by-month breakdown of your costs.
Calculate
Click “calculate” to get your monthly payment amount and an amortization schedule.
The effect of prepayments
Now use the mortgage payment calculator to see how prepaying some of the principal saves money over time. The calculator allows you to enter a monthly, annual, bi-weekly or one-time amount for additional principal prepayment.To do so, click “+ Prepayment options.”
Let’s say, for example, you want to pay an extra $50 a month. Using the $250,000 example above, enter “50” in the monthly principal prepayment field, then either hit “tab” or scroll down to click “calculate.” Initial results will be displayed under “Payment details,” and you can see further details in either the “Payment chart” or “Amortization schedule” tabs.
You may also target a certain loan term or monthly payment by using our mortgage prepayment calculator. Of course you’ll want to consult with your financial advisor about whether it’s best to prepay your mortgage or put that money toward something else, such as retirement.