| Amortization Schedule Calculator | | | | 1 $500.00 $99.55 $99,900.45 |
| Understanding an amortization schedule can be very | | | | 2 $499.50 $100.05 $99,800.40 |
| useful. A mortgage amortization schedule is broken | | | | 3 $499.00 $100.55 $99,699.85 |
| down on a monthly basis to show you exactly what | | | | 4 $498.50 $101.05 $99,598.80 |
| you're paying the bank each month and how much | | | | 5 $497.99 $101.56 $99,497.24 |
| you still owe. I could probably survey 100 people and | | | | 6 $497.49 $102.06 $99,395.18 |
| 50 of them wouldn't even know how much they owe | | | | 7 $496.98 $102.57 $99,292.61 |
| on their mortgage. These people are going to be taken | | | | 8 $496.46 $103.09 $99,189.52 |
| advantage of at some point in the mortgage process. | | | | 9 $495.95 $103.60 $99,085.92 |
| With some basic knowledge on mortgage calculators | | | | 10 $495.43 $104.12 $98,981.79 |
| and interest rates you can understand when someone | | | | 11 $494.91 $104.64 $98,877.15 |
| might be trying to trick you. | | | | 12 $494.39 $105.16 $98,771.99 |
| Your mortgage is recalculated each month based on | | | | First of all, in the amortization schedule the "Interest |
| how much principal is paid down. Your mortgage | | | | payment" and "principal payment" columns will always |
| payment will always stay the same, but the principal | | | | equal your monthly payment amount of $599.55. |
| goes up and the interest will come down as time goes | | | | Some of it will go toward the $100,000 that you owe, |
| on. Example below: | | | | and the rest of it goes toward interest. |
| Enter this information into a mortgage calculator; | | | | Notice that the amount you owe is lowered by the |
| Mortgage amount - $100,000.00 | | | | amount of principal you pay each month (100,000 - |
| Fixed Interest Rate - 6.0% | | | | 99.55 = 99,900.45) If you pay an extra $200.00 toward |
| Years - 30 | | | | principal then it would be 100,000 - 99.55 - 200.00 = |
| Based on that information you will see that the monthly | | | | 99,700.45. |
| mortgage payment is $599.55 and over the course of | | | | The interest payment goes to the bank for loaning you |
| 30 years you will have paid $115,838.19 JUST in | | | | that specific amount of money. The bank tells you the |
| interest! That's more than the cost of the home itself! | | | | yearly interest rate (6%) for added confusion because |
| It's only natural to try and reduce that number. First, we | | | | it's actually calculated monthly. Take your yearly |
| need to understand it by looking at the information | | | | interest rate and divide it by 12 (12 months). You can |
| from the mortgage calculator. | | | | plug those numbers into a mortgage calculator or see |
| The graph below shows you the breakdown of each | | | | the graph above. 6% / 12 months = 0.50% per month. |
| payment you make over the first year. | | | | So you owe 100,000 x .005 (.50%) = $500.00 in interest |
| Monthly Payment - $599.55 | | | | for the first month (See above graph). So the less |
| Month Interest Payment Principal Payment Remaining | | | | money you owe the bank, the less interest you pay |
| Balance | | | | each month. That's why paying principal down faster is |
| $100,000.00 | | | | better. |