Calculate your mortgage to see the amortization schedule.
Understanding Your Mortgage Loan and Amortization
A mortgage is a loan used to purchase real estate, where the property itself serves as collateral. Understanding the terms of your mortgage is crucial for long-term financial planning. This calculator helps you estimate your monthly payments and visualize how your loan balance decreases over time through an amortization schedule.
The Math Behind Your Monthly Payment
The standard formula for calculating the monthly payment (M) of a mortgage loan is based on the principal loan amount (P), the monthly interest rate (r), and the total number of payments (n).
Formula:
M = P [ r(1 + r)^n ] / [ (1 + r)^n – 1]
Where:
P = Principal Loan Amount (the total amount you borrow)
n = Total Number of Payments (Loan Term in Years * 12)
For example, if you borrow $200,000 at an annual interest rate of 4.5% for 30 years:
P = $200,000
Annual Rate = 4.5%
Monthly Rate (r) = 4.5 / 12 / 100 = 0.00375
Loan Term = 30 years
Total Payments (n) = 30 * 12 = 360
Plugging these values into the formula results in a monthly principal and interest payment.
What is an Amortization Schedule?
An amortization schedule is a table that details each periodic payment on an amortizing loan (like a mortgage). For each payment, the schedule shows how much of the payment goes towards the principal and how much goes towards the interest. It also shows the remaining balance of the loan after each payment.
Key Components of an Amortization Schedule:
Payment Number: The sequential number of the payment (1, 2, 3, … n).
Payment Date: The date the payment is due.
Beginning Balance: The loan balance at the start of the payment period.
Payment Amount: The fixed amount paid each period (calculated above).
Interest Paid: The portion of the payment that covers the interest accrued during the period. This is calculated as (Beginning Balance * Monthly Interest Rate).
Principal Paid: The portion of the payment that reduces the loan's principal balance. This is calculated as (Payment Amount – Interest Paid).
Ending Balance: The loan balance after the payment is applied. This is calculated as (Beginning Balance – Principal Paid).
Initially, a larger portion of your monthly payment goes towards interest. As the loan matures, the proportion of interest decreases, and more of your payment is applied to reducing the principal balance. This process continues until the ending balance reaches zero at the end of the loan term.
Why Use a Mortgage Calculator?
Budgeting: Accurately estimate your monthly housing costs.
Affordability: Determine how much house you can afford based on your budget.
Loan Comparison: Compare different loan options (e.g., 15-year vs. 30-year mortgage) to see the impact on payments and total interest.
Financial Planning: Understand the long-term financial commitment and track your progress in paying off your home.
This calculator provides an essential tool for prospective homeowners and existing homeowners looking to understand their mortgage obligations better. Always consult with a financial advisor for personalized advice.
function calculateMortgage() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseInt(document.getElementById("loanTerm").value);
var monthlyPaymentResult = document.getElementById("monthlyPayment");
var totalPrincipalResult = document.getElementById("totalPrincipal");
var totalInterestResult = document.getElementById("totalInterest");
var totalAmountPaidResult = document.getElementById("totalAmountPaid");
var amortizationScheduleDiv = document.getElementById("amortizationSchedule");
// Clear previous results and schedule
monthlyPaymentResult.textContent = "$0.00";
totalPrincipalResult.textContent = "$0.00";
totalInterestResult.textContent = "$0.00";
totalAmountPaidResult.textContent = "$0.00";
amortizationScheduleDiv.innerHTML = 'Calculating…';
// 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 zero interest rate case (though unlikely for mortgages)
monthlyPayment = loanAmount / numberOfPayments;
}
var totalAmountPaid = monthlyPayment * numberOfPayments;
var totalInterest = totalAmountPaid – loanAmount;
monthlyPaymentResult.textContent = formatCurrency(monthlyPayment);
totalPrincipalResult.textContent = formatCurrency(loanAmount); // Total principal paid is the loan amount itself
totalInterestResult.textContent = formatCurrency(totalInterest);
totalAmountPaidResult.textContent = formatCurrency(totalAmountPaid);
// Generate Amortization Schedule
var scheduleHTML = '
Month
Beginning Balance
Payment
Interest Paid
Principal Paid
Ending Balance
';
var beginningBalance = loanAmount;
var totalInterestPaidSchedule = 0;
var totalPrincipalPaidSchedule = 0;
for (var month = 1; month <= numberOfPayments; month++) {
var interestPayment = beginningBalance * monthlyInterestRate;
var principalPayment = monthlyPayment – interestPayment;
// Adjust for potential rounding issues in the last payment
if (month === numberOfPayments) {
principalPayment = beginningBalance;
monthlyPayment = interestPayment + principalPayment; // Recalculate final payment to ensure balance is zero
totalAmountPaid = (monthlyPayment * (month – 1)) + monthlyPayment; // Recalculate total paid
totalInterest = totalAmountPaid – loanAmount; // Recalculate total interest
totalInterestResult.textContent = formatCurrency(totalInterest);
totalAmountPaidResult.textContent = formatCurrency(totalAmountPaid);
}
var endingBalance = beginningBalance – principalPayment;
scheduleHTML += '