A mortgage amortization calculator is an essential tool for understanding the financial commitment of buying a home. It breaks down your monthly mortgage payment into principal and interest components and shows how your loan balance decreases over time. This process, known as amortization, is crucial for homeowners to grasp their long-term financial obligations.
How Mortgage Amortization Works
A standard mortgage involves a series of regular payments over a set period (the loan term). Each payment you make covers two parts:
Principal: This is the actual amount you borrowed. Paying down the principal reduces your loan balance.
Interest: This is the cost of borrowing the money, calculated as a percentage of your outstanding loan balance.
In the early years of a mortgage, a larger portion of your monthly payment goes towards interest, with a smaller amount applied to the principal. As time progresses, this ratio shifts. In the later years of the loan, more of your payment is dedicated to paying down the principal, and less goes towards interest.
The Amortization Formula
The monthly payment (M) for a mortgage is calculated using the following formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
P = Principal loan amount
i = Monthly interest rate (Annual interest rate divided by 12)
n = Total number of payments (Loan term in years multiplied by 12)
Our calculator uses this formula to determine your fixed monthly payment. It then generates an amortization schedule that details how each payment is allocated and how the loan balance changes month by month.
Key Components of the Calculator
Loan Amount (P): The total sum you are borrowing to purchase your property.
Annual Interest Rate: The yearly percentage charged by the lender on the outstanding balance. This is converted to a monthly rate (i) for calculations.
Loan Term (Years): The total duration over which you agree to repay the loan. This is converted to the total number of monthly payments (n).
Monthly Payment: The fixed amount you pay each month towards your mortgage.
Total Principal Paid: The sum of all principal portions of your payments over the life of the loan, equaling the original loan amount.
Total Interest Paid: The cumulative amount of interest paid over the entire loan term.
Total Cost: The sum of the total principal and total interest paid, representing the overall cost of the home loan.
Amortization Schedule: A detailed table showing the breakdown of each payment, including how much goes to principal and interest, and the remaining balance after each payment.
Why Use an Amortization Calculator?
Understanding your mortgage's amortization schedule can help you:
Budget Effectively: Know precisely how much your mortgage will cost you each month and over its entire life.
Plan for Extra Payments: See how making additional principal payments can significantly reduce the total interest paid and shorten the loan term.
Compare Loan Offers: Evaluate different mortgage options by comparing their terms, rates, and total costs.
Financial Planning: Integrate mortgage payments accurately into your long-term financial planning.
Our calculator provides a clear and comprehensive view of your mortgage's financial journey, empowering you to make informed decisions about your homeownership.
function calculateMortgageAmortization() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseFloat(document.getElementById("loanTerm").value);
var resultDiv = document.getElementById("result");
var scheduleBody = document.getElementById("scheduleBody");
// Clear previous results and schedule
scheduleBody.innerHTML = ";
resultDiv.style.display = 'none';
// Input validation
if (isNaN(loanAmount) || loanAmount <= 0 ||
isNaN(interestRate) || interestRate < 0 ||
isNaN(loanTerm) || loanTerm 0) {
monthlyPayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
} else { // Handle 0% interest rate case
monthlyPayment = loanAmount / numberOfPayments;
}
// Format monthly payment to two decimal places
var formattedMonthlyPayment = monthlyPayment.toFixed(2);
// Calculate total principal, total interest, and total cost
var totalPrincipalPaid = loanAmount;
var totalInterestPaid = (monthlyPayment * numberOfPayments) – loanAmount;
var totalCost = loanAmount + totalInterestPaid;
// Populate summary results
document.getElementById("monthlyPayment").innerText = "$" + parseFloat(formattedMonthlyPayment).toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 });
document.getElementById("totalPrincipal").innerText = "$" + parseFloat(totalPrincipalPaid).toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 });
document.getElementById("totalInterest").innerText = "$" + parseFloat(totalInterestPaid).toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 });
document.getElementById("totalCost").innerText = "$" + parseFloat(totalCost).toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 });
// Generate amortization schedule
var remainingBalance = loanAmount;
var monthNum = 1;
while (remainingBalance > 0.01 && monthNum remainingBalance) {
principalForMonth = remainingBalance;
monthlyPayment = interestForMonth + principalForMonth; // Adjust monthly payment for the last payment
}
remainingBalance -= principalForMonth;
// Ensure remaining balance doesn't go below zero due to rounding
if (remainingBalance < 0) {
remainingBalance = 0;
}
var row = scheduleBody.insertRow();
var cellMonth = row.insertCell(0);
var cellPayment = row.insertCell(1);
var cellPrincipal = row.insertCell(2);
var cellInterest = row.insertCell(3);
var cellBalance = row.insertCell(4);
cellMonth.innerText = monthNum;
cellPayment.innerText = "$" + monthlyPayment.toFixed(2);
cellPrincipal.innerText = "$" + principalForMonth.toFixed(2);
cellInterest.innerText = "$" + interestForMonth.toFixed(2);
cellBalance.innerText = "$" + remainingBalance.toFixed(2);
// Apply alternating row colors for readability
if (monthNum % 2 === 0) {
row.style.backgroundColor = "#f0f8ff";
} else {
row.style.backgroundColor = "#ffffff";
}
monthNum++;
}
resultDiv.style.display = 'block';
}