1. What is a Mortgage Loan Amortization Calculator?

The mortgage loan amortization calculator computes your monthly payment and generates a schedule showing how each payment is split between principal and interest over the life of your loan.

2. How Does the Calculator Work?

The calculator uses the standard mortgage payment formula:

Where:

• \( PMT \) — Monthly payment
• \( P \) — Principal loan amount
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Number of payments (loan term in years × 12)

Explanation: The formula calculates the fixed monthly payment required to fully amortize (pay off) the loan over its term, accounting for compound interest.

3. Importance of Amortization Schedule

Details: The amortization schedule shows how much of each payment goes toward interest versus principal. Early payments are mostly interest, while later payments apply more to principal.

4. Using the Calculator

Tips: Enter the loan amount (principal), annual interest rate, and loan term in years. The calculator will show your monthly payment and generate an amortization schedule.

5. Frequently Asked Questions (FAQ)

Q1: How does extra principal payment affect my loan?
A: Extra payments reduce principal faster, saving interest and potentially shortening the loan term.

Q2: What's the difference between interest rate and APR?
A: The interest rate is the cost of borrowing, while APR includes fees and other loan costs.

Q3: Why does most of my early payment go to interest?
A: Interest is calculated on the outstanding balance, which is highest at the beginning of the loan.

Q4: How often should I review my amortization schedule?
A: Review annually or whenever considering refinancing or making extra payments.

Q5: Can I change my payment frequency?
A: Some lenders allow biweekly payments (26 payments/year instead of 12 monthly), which can pay off your loan faster.