Mortgage Calculator with Amortization Table

How to Use This Mortgage Calculator

Enter Your Purchase Details: Start by inputting the total home price and your down payment amount.
Enter Loan Details: Add the annual interest rate and the loan term in years.
Calculate Your Payment: Click the "Calculate" button to instantly see your results.
Analyze and Visualize: The calculator will show your estimated monthly payment, the total principal you'll pay, and the total interest. The charts and table below will visually represent your loan's breakdown and how the balance decreases over time.

Summary of Your Loan

Yearly Amortization Schedule

Year	Principal Paid	Interest Paid	Total Payment	Ending Balance

Understanding How Monthly Mortgage is Calculated

The foundation of this mortgage calculator is the standard amortization formula. This formula is used by lenders to calculate the fixed monthly payment (M) required to fully pay off a loan over a set period.

$$ M = P \frac{r(1+r)^n}{(1+r)^n - 1} $$

M = Your total monthly mortgage payment (Principal + Interest).
P = The principal loan amount (Home Price - Down Payment).
r = Your monthly interest rate. This is calculated by dividing your annual interest rate by 12.
n = The total number of payments over the loan’s lifetime (the loan term in years multiplied by 12).

Each mortgage payment you make consists of two parts: principal and interest. In the beginning of the loan, a larger portion of your payment goes toward interest. As you pay down the balance, more of your payment goes toward the principal.

Step-by-Step Calculation Example

Let's walk through an example using the default values: a $300,000 home with a $60,000 down payment over 30 years at a 6.5% interest rate.

Identify Your Variables:
- Home Price = $300,000
- Down Payment = $60,000
- Annual Interest Rate = 6.5% (or 0.065)
- Loan Term = 30 years
Calculate the Principal Loan Amount (P):
Subtract the down payment from the home price.
$$ P = \$300,000 - \$60,000 = \$240,000 $$
Calculate the Monthly Interest Rate (r):
Divide the annual rate by 12 months.
$$ r = \frac{0.065}{12} = 0.00541667 $$
Calculate the Total Number of Payments (n):
Multiply the number of years by 12 months.
$$ n = 30 \times 12 = 360 $$
Plug the Values into the Formula:
$$ M = 240,000 \frac{0.00541667(1+0.00541667)^{360}}{(1+0.00541667)^{360} - 1} $$
Solve the Equation:
$$ M = 240,000 \frac{0.0379747}{6.00996} = 240,000 \times 0.0063186 $$
Calculate the Final Monthly Payment (M):
$$ M = \$1,516.47 $$

This step-by-step process shows how lenders arrive at the fixed monthly payment for the entire duration of your loan.

Real-World Use Cases & Examples

Scenario 1: Comparing Loan Terms

Situation: Alex and Ben are buying a $500,000 home with a $100,000 down payment, leaving them with a $400,000 mortgage at a 6% interest rate. They want to see the difference between a 30-year and a 15-year term.

30-Year Term: Their monthly payment would be $2,398.20. Over 30 years, they would pay $463,352 in total interest.
15-Year Term: Their monthly payment would be higher at $3,375.40. However, they would only pay $207,572 in total interest, saving over $255,000 compared to the 30-year loan.

Outcome: This comparison shows the powerful trade-off between a lower monthly payment and the total cost of the loan. A shorter term saves a massive amount of interest but requires a higher monthly commitment.

Scenario 2: The Impact of Interest Rates

Situation: Sarah is approved for a $250,000 mortgage on a $300,000 home after a $50,000 down payment. She has offers for a 6.5% interest rate and a 7% interest rate on a 30-year loan.

6.5% Rate: Her monthly payment would be $1,580.17, with total interest of $318,861.
7% Rate: Her monthly payment would be $1,663.26, with total interest of $348,774.

Outcome: A seemingly small 0.5% difference in the interest rate results in an $83 higher monthly payment and nearly $30,000 more in total interest paid over the life of the loan. This highlights the importance of shopping for the best possible interest rate.

Frequently Asked Questions (FAQs)

Does this mortgage calculator include taxes and insurance?

No, this calculator focuses specifically on the principal and interest (P&I) components of your mortgage. Your actual monthly payment to your lender, often called PITI, also includes property taxes and homeowner's insurance. These costs can add several hundred dollars to your monthly payment.

What is amortization?

Amortization is the process of paying off a debt over time through regular payments. An amortization schedule is a table detailing each payment on a loan, showing how much of each payment is applied to interest and how much to the principal. Our "Loan Balance Over Time" chart and the yearly table visualize this schedule.

How can I lower my monthly mortgage payment?

There are several ways to get a lower monthly payment: choose a longer loan term (e.g., 30 years instead of 15), make a larger down payment to reduce the principal loan amount, or secure a lower interest rate by improving your credit score or shopping with different lenders.

What is the difference between principal and interest?

The principal is the amount of money you originally borrowed from the lender. The interest is the cost of borrowing that money, expressed as a percentage of the loan amount. Each monthly payment you make is a mix of both.

Helpful Resources & Further Reading

External Resources

The Consumer Financial Protection Bureau (CFPB) provides unbiased information for homeowners.
Find information on housing and mortgage assistance from the U.S. Department of Housing and Urban Development (HUD).

Mortgage Calculator

How to Use This Mortgage Calculator

Enter Your Loan Details

Your Loan Summary

Principal vs. Interest

Loan Breakdown Over Time