How You Can Calculate Mortgage Amortization

Mortgage is a debt instrument that a borrower is obligated to pay back within a predetermined period and a predetermined number of payments. Whereas, amortization is the process of paying off a debt over the period of time. There are several ways in which you can calculate the monthly payments of your loan. First option is that you can calculate it manually by directly applying the formula. In short, the formula is such that the ‘monthly payment is equal to the principal amount into monthly interest divided by one minus monthly interest over the negative amount of number of months’.

The second option is that you can use the help of a spreadsheet or Excel. The third option is to use the online mortgage amortization calculators. This calculator generates an amortization schedule. Mortgage amortization schedule is a table containing details of the periodic payment on the mortgage.

Why Mortgage Amortization Calculator Matters?

It is always a smart move to know your expenses beforehand. Therefore, you should know what it will take for you to pay back the mortgage or loan. Choosing a right credit is important and moreover, keeping the track of your amortizations is even more important. It determines your credit worthiness in the future and gives you the ability to plan your repayments. Hence, mortgage amortization calculator becomes a necessity for you.

How to use the Mortgage Amortization Calculator?

The mortgage amortization calculator is also known as the amortization schedule calculator. As mentioned above, it will let you estimate your monthly loan repayments over the period of your predetermined pay back duration. To calculate your amortization, you will only need these details:

  • Loan Amount. The total amount of mortgage.
  • Loan Term. This is the total payback period, e.g. 10 years.
  • Interest rate. This is the percentage mortgage rate.
  • Start Date. The starting date of your mortgage period.

Just enter these things in the amortization calculator and avoid all the hectic work of trying to use the amortization formula by yourself or trying to figure out a way to use Excel for this purpose.


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