A mortgage amortization calculator is a vital tool for any homebuyer. It helps you understand the breakdown of your monthly mortgage payments over the life of the loan. Amortization is the process of paying off a debt over time through regular, scheduled payments. Each payment you make consists of two parts: interest and principal.
How Mortgage Payments Are Calculated
The standard formula for calculating a fixed monthly mortgage payment (M) is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
P = Principal loan amount (the amount you borrowed)
i = Monthly interest rate (annual interest rate divided by 12)
n = Total number of payments over the loan's lifetime (loan term in years multiplied by 12)
Our calculator uses this formula to determine your fixed monthly payment. It then generates an amortization schedule showing how each payment is allocated between interest and principal, and how your loan balance decreases over time.
Key Components of Your Mortgage Payment:
Principal: The portion of your payment that goes towards reducing the actual amount you owe.
Interest: The cost of borrowing the money, calculated on your outstanding loan balance. In the early years of a mortgage, a larger portion of your payment goes towards interest. As you pay down the principal, the interest portion decreases, and the principal portion increases.
Why Use an Amortization Calculator?
Budgeting: Accurately estimate your monthly housing expenses.
Loan Comparison: Compare different loan offers with varying interest rates and terms to find the most cost-effective option.
Financial Planning: Understand how much interest you'll pay over the life of the loan and plan for extra payments to pay it off faster.
Decision Making: Evaluate the affordability of a home purchase.
By using this calculator, you gain transparency into your mortgage payments, empowering you to make informed financial decisions regarding your homeownership journey.
function calculateAmortization() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var loanTermYears = parseInt(document.getElementById("loanTermYears").value);
var resultDiv = document.getElementById("result");
var amortizationTableDiv = document.getElementById("amortizationTable");
var scheduleBody = document.getElementById("scheduleBody");
// Clear previous results and table
resultDiv.style.display = "none";
amortizationTableDiv.style.display = "none";
scheduleBody.innerHTML = "";
// Input validation
if (isNaN(loanAmount) || isNaN(annualInterestRate) || isNaN(loanTermYears) || loanAmount <= 0 || annualInterestRate < 0 || loanTermYears 0.01 && currentPaymentNumber balance) {
principalPayment = balance;
monthlyPayment = interestPayment + principalPayment; // Recalculate last payment if needed
}
balance -= principalPayment;
// Prevent negative balance due to floating point inaccuracies
if (balance < 0) {
balance = 0;
}
var row = scheduleBody.insertRow();
var cell1 = row.insertCell(0);
var cell2 = row.insertCell(1);
var cell3 = row.insertCell(2);
var cell4 = row.insertCell(3);
var cell5 = row.insertCell(4);
cell1.textContent = currentPaymentNumber;
cell2.textContent = "$" + monthlyPayment.toFixed(2);
cell3.textContent = "$" + interestPayment.toFixed(2);
cell4.textContent = "$" + principalPayment.toFixed(2);
cell5.textContent = "$" + balance.toFixed(2);
}
amortizationTableDiv.style.display = "block";
}