Mortgage amortization is the process of paying off a home loan over time through regular payments. While your total monthly payment remains consistent for fixed-rate mortgages, the breakdown of that payment changes significantly over the life of the loan. In the early years, a large portion of your payment goes toward interest, with only a small amount reducing your principal balance. As time passes, this ratio shifts, accelerating your equity build-up.
How the Amortization Formula Works
Banks use a specific mathematical formula to ensure that your loan is paid off exactly at the end of your term (e.g., 30 years). The calculation determines a fixed monthly payment ($M$) based on your principal loan amount ($P$), monthly interest rate ($r$), and total number of months ($n$):
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
Even a small variance in interest rates can drastically affect the total interest paid over the life of the loan. For example, on a $300,000 loan, the difference between a 6% and 7% interest rate can amount to tens of thousands of dollars in extra costs.
The Power of Extra Payments
One of the most effective strategies to save money is making extra principal payments. Because interest is calculated based on your remaining balance, reducing that balance faster than scheduled reduces the interest charged in every subsequent month.
shorten your loan term: Paying an extra $100 a month can knock years off a 30-year mortgage.
Save on Interest: Every dollar of extra principal payment saves you the interest that dollar would have accrued for the remainder of the loan term.
Build Equity Faster: You own more of your home sooner, giving you more financial flexibility.
How to Use This Calculator
This Mortgage Amortization Calculator is designed to help you visualize your loan trajectory. simply enter your current loan balance (or purchase price minus down payment), your annual interest rate, and the term of the loan.
If you plan to pay down your debt aggressively, input an amount in the "Extra Monthly Payment" field. The calculator will instantly show you how much interest you will save and how much sooner you will be debt-free. Review the amortization schedule table to see exactly how your money is being applied month by month.
Frequently Asked Questions
What is an amortization schedule?
It is a complete table of periodic loan payments, showing the amount of principal and the amount of interest that comprise each payment until the loan is paid off.
Does making extra payments really help?
Yes. Since mortgage interest is front-loaded, making extra payments early in the loan term has a compounding effect on your savings.
function calculateMortgage() {
// 1. Get Input Values
var amountInput = document.getElementById("loanAmount");
var rateInput = document.getElementById("interestRate");
var termInput = document.getElementById("loanTerm");
var extraInput = document.getElementById("extraPayment");
var principal = parseFloat(amountInput.value);
var annualRate = parseFloat(rateInput.value);
var years = parseInt(termInput.value);
var extraPayment = parseFloat(extraInput.value);
// 2. Validate Inputs
if (isNaN(principal) || principal <= 0) {
alert("Please enter a valid Loan Amount.");
return;
}
if (isNaN(annualRate) || annualRate < 0) {
alert("Please enter a valid Interest Rate.");
return;
}
if (isNaN(extraPayment) || extraPayment 0.01) {
actualMonths++;
// Calculate Interest for this month
var interestPart = balance * monthlyRate;
// Calculate Principal for this month
var principalPart = monthlyPayment – interestPart;
// Total payment this month (Standard + Extra)
var totalMonthlyPay = monthlyPayment + extraPayment;
// Handle last payment edge case
if (balance < totalMonthlyPay) {
// If remaining balance is less than scheduled payment
principalPart = balance;
interestPart = balance * monthlyRate; // Interest on remaining
totalMonthlyPay = principalPart + interestPart;
} else {
// Apply extra payment to principal
principalPart += extraPayment;
}
// Update running totals
totalInterest += interestPart;
totalPaid += totalMonthlyPay;
balance -= principalPart;
// Generate Table Row (Only for first 60 months)
if (actualMonths <= maxTableRows) {
htmlRows += "
";
htmlRows += "
" + actualMonths + "
";
htmlRows += "
$" + totalMonthlyPay.toFixed(2) + "
";
htmlRows += "
$" + principalPart.toFixed(2) + "
";
htmlRows += "
$" + interestPart.toFixed(2) + "
";
htmlRows += "
$" + Math.max(0, balance).toFixed(2) + "
";
htmlRows += "
";
}
// Break loop if it goes too long (safety)
if (actualMonths > 1000) break;
}
// 5. Calculate Savings and Dates
var interestSaved = Math.max(0, totalInterestStandard – totalInterest);
// Calculate Payoff Date
var payoffDate = new Date();
payoffDate.setMonth(date.getMonth() + actualMonths);
var payoffMonthStr = payoffDate.toLocaleString('default', { month: 'long' });
var payoffYearStr = payoffDate.getFullYear();
// 6. Output Results to DOM
document.getElementById("resMonthlyPayment").innerText = "$" + monthlyPayment.toFixed(2);
document.getElementById("resTotalMonthly").innerText = "$" + (monthlyPayment + extraPayment).toFixed(2);
document.getElementById("resNumPayments").innerText = actualMonths + " Months (" + (actualMonths/12).toFixed(1) + " Years)";
document.getElementById("resTotalInterest").innerText = "$" + totalInterest.toFixed(2);
document.getElementById("resTotalCost").innerText = "$" + totalPaid.toFixed(2);
document.getElementById("resPayoffDate").innerText = payoffMonthStr + " " + payoffYearStr;
if (extraPayment > 0) {
document.getElementById("resInterestSaved").innerText = "$" + interestSaved.toFixed(2);
} else {
document.getElementById("resInterestSaved").innerText = "$0.00";
}
// Show Results Areas
document.getElementById("resultsArea").style.display = "block";
// Populate and Show Table
tableBody.innerHTML = htmlRows;
document.getElementById("tableArea").style.display = "block";
}