Although your monthly payment will be the same each month, the amount going toward principal will increase each month and the amount going toward interest will decrease each month as you pay down your balance. The calculator’s amortization schedule (click above to open it) will show you the details.

Most people need a mortgage to buy a home. The median U.S. home costs more than $350,000 as of February 2022, and few people have that much extra cash lying around. What’s more, mortgage rates are so low that even people with plenty of savings may prefer to borrow for a home purchase to maintain the financial security of having well-funded emergency savings and retirement accounts. And, of course, there’s the tax deduction for mortgage interest.

With our mortgage amortization calculator, you can see your estimated monthly payment and how the total cost of your mortgage will change depending on your interest rate. Try out different inputs for home price, down payment, interest rate, and loan term to understand the long-term impact of a mortgage before you sign the paperwork. This calculator can help you whether you’re buying a home or refinancing.

A mortgage amortization calculator will show you the long-term cost of a fixed-rate mortgage by compiling the total interest that you will pay over the life of your mortgage. It also itemizes the principal and interest of each monthly payment to show you how your mortgage payments are structured.

Mortgage Amortization Calculator Results Explained

Monthly payment: See what you will pay for principal and interest each month. Keep in mind that there are many other monthly expenses associated with homeownership: homeowners insurance, property taxes, utilities, maintenance, and repairs. Depending on your neighborhood and property type, you may also pay homeowners association fees. If you put down less than 20%, then your lender may require you to pay mortgage insurance premiums.

Total principal paid: The mortgage size (the amount that you borrow) and the total principal paid are the same thing. This amount is equal to the home’s purchase price minus your down payment, plus any closing costs that you finance.

Total interest paid: The biggest part of your total borrowing cost if you keep your loan for the full term (usually 15 or 30 years) is your total interest paid. You can add your mortgage closing costs and mortgage insurance premiums (if any) to total interest paid to understand the true long-term cost of borrowing.

Estimated final payment date: You don’t really need a calculator to give yourself the estimated payoff date of your loan. Just add 15 or 30 years to the date when you start paying your loan. If you make your first payment on March 1, 2021, then your 30-year mortgage will be paid off by March 1, 2051. But we’ll save you the math and let the calculator tell you the estimated payoff date.

Running total of interest: When you expand the amortization schedule that the calculator creates, you’ll see a column showing how much interest you’ve paid by each point in your mortgage. It might be $5,000 by March 1, 2022; $9,500 by March 1, 2023; and so on.

Total remaining balance: Expanding the amortization schedule will also show you how close you are to paying off your loan principal each month. After one year, you might still owe $196,000 on a $200,000 mortgage; after two years, $192,000; after 10 years, $155,000; and so on.

How to Speed Up Mortgage Amortization

Are you horrified by the total interest cost that the calculator shows you? That’s normal. It’s one thing to know that your monthly payment is $900, and another to see that you’re going to pay $123,000 in interest over the next 30 years. Fortunately, you have several options to speed up mortgage amortization—to pay off your loan faster and save money.

Choose a shorter loan term: If you select a shorter amortization period for your mortgage—for example, 15 years instead of 30—then you will save considerably on interest over the life of the loan and own your home sooner. Also, interest rates on shorter-term loans are often lower compared to longer-term loans. A shorter-term mortgage may be a good option if you can handle higher monthly payments without hardship for the entire loan term. If not, there’s another option.

Make extra principal payments: To keep your mortgage term the same and avoid tying yourself to higher monthly payments, you can make one extra principal payment per year in the amount of your normal monthly payment. You’ll shave about five years off a 30-year mortgage this way. If you have a financial hardship one year, you can skip the extra payment. If you get a large bonus or tax refund one year, you can double up on the extra payment. You’ll have more control—but less accountability—if you choose this strategy for speeding up mortgage amortization.

Understanding Mortgage Amortization

A mortgage amortization schedule is calculated using the loan amount, loan term, and interest rate. If you know these three things, you can use Excel’s PMT function to calculate your monthly payment. For a 30-year, $150,000 mortgage with a 3.5% interest rate, the equation to enter in an Excel cell would be =PMT(3.5%/12,360,150000). The result will be $673.57.

Once you know your monthly payment, you can calculate how much of your monthly payment is going toward principal and how much is going toward interest using this formula:

Principal Payment = Total Monthly Payment - [Outstanding Loan Balance × (Interest Rate / 12 Months)]

Multiply $150,000 by 3.5%/12 to get $437.50. That’s your interest payment for your first monthly payment.

Subtract that from your monthly payment to get your principal payment: $236.07.

Check your math: $437.50 + $236.07 = $673.57, the total monthly payment that we calculated above.

Next month, your loan balance will be $236.07 smaller because that’s how much of your payment goes toward principal. To see how much of next month’s monthly payment goes toward principal and interest, repeat the calculation with a principal amount of $149,763.93, the result of subtracting $236.07 from $150,000.

This time, your interest payment will be $436.81, and your principal payment will be $236.76.

Just repeat this process another 358 times and you’ll have yourself an amortization table for a 30-year loan.

Now you know why using a mortgage amortization calculator is so much easier. But some people may have an easier time wrapping their head around mortgage amortization by understanding how the math behind the calculator works.