Mortgage amortization calculator
Mortgage amortization calculator
Your amortization schedule will show you how much of your monthly mortgage payments you spend toward principal and interest.
An amortization calculator enables you to take a snapshot of the interest and principal (the debt) paid in any month of the loan.
“Amortization” is a word for the way debt is repaid in a mortgage, where each monthly payment is the same (excluding taxes and insurance). In the beginning years, most of each payment goes toward interest and only a little goes to debt reduction. That ratio gradually changes, and it flips in the later years of the mortgage. This is amortization at work.
Why does it take so long to pay down my principal?
The simple answer is: The lender gets paid first. In the early years of your mortgage, your monthly loan payment is heavily weighted to paying interest. Just a tiny reduction of the principal loan balance occurs with each payment at this stage. The rest of the payment often goes to insurance, taxes and other expenses wrapped into the monthly amount due.
As years pass, you’ll begin to see more of your payment going to principal — a greater amount is reducing the debt and less is being spent on interest.