Interactive Mortgage Amortisation Calculator

Visualize your loan payments, see the impact of extra contributions, and plan your path to being mortgage-free.

Loan Details

Accelerate Your Payoff

Optional Costs

These optional costs are part of your escrow payment. ? Escrow is an account managed by your lender to pay property taxes and insurance on your behalf.

Full Amortisation Schedule

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Month Payment Principal Interest Extra Payment Ending Balance

How This Calculator Works: The Formulas

This calculator builds a full month-by-month schedule for your loan to accurately project its payoff. It runs two simulations: one for your standard loan and one with your extra payments.

1 The Monthly Payment Formula (PMT)

First, we calculate your base Principal & Interest (P&I) payment using the standard PMT formula. This formula is provided by `js/utils.js` and is the foundation for the schedule.

M = P * [r(1+r)^n] / [(1+r)^n - 1]
  • M = Your monthly P&I payment
  • P = Your Loan Principal (e.g., $300,000)
  • r = Your monthly interest rate (e.g., 6.5% / 12 / 100 = 0.005417)
  • n = Your total number of payments (e.g., 30 years * 12 = 360)

2 The Amortization Loop (Month by Month)

The calculator then loops through each month until the loan is paid off, performing the following calculations:

  • Interest This Month = Current Balance * Monthly Rate (r)
  • Principal This Month = Monthly Payment (M) - Interest This Month
  • Total Principal Paid = Principal This Month + Extra Monthly + One-Time Payment (if applicable)
  • New Balance = Current Balance - Total Principal Paid

3 Opportunity Cost Formula

When you add extra payments, the "Opportunity Cost" chart simulates what would happen if you invested that extra money instead. It calculates the future value of your extra payments using a compound interest formula.

  • Periodic Investment Rate = Annual Investment Return / 12 / 100
  • New Investment Value = (Previous Value + All Extra Payments This Month) * (1 + Periodic Investment Rate)

A Homeowner's Guide to Mortgage Amortisation

What is a Mortgage Amortisation Schedule?

An amortisation schedule is a detailed, month-by-month table that shows exactly where your mortgage payment goes. It breaks down each payment into two key components:

  • Principal: The portion of your payment that goes toward paying down the actual loan amount you borrowed. This is what builds your home equity.
  • Interest: The fee you pay to the lender for the privilege of borrowing money. This is the lender's profit and does not reduce your loan balance.

How to Read Your Amortisation Table

Understanding your loan amortization schedule is key to financial planning. When you use this calculator, it generates an amortization table mortgage lenders use, which shows a clear breakdown. Each row in the table represents one payment period (usually a month) and contains several important columns:

  • »
    Payment: This is your fixed monthly principal and interest payment. It remains constant throughout the loan (unless you have an ARM).
  • »
    Principal: The amount of your payment that reduces your loan balance. This number starts small and grows larger over time.
  • »
    Interest: The portion of your payment that goes to the lender. This number is largest at the beginning and shrinks with every payment.
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    Ending Balance: Your remaining loan balance after the payment is applied. Watching this number go down is one of the most satisfying parts of homeownership! The mortgage amortization chart above visualizes this decline.

Amortisation for Different Terms

The length of your loan has a massive impact on your monthly payment and the total interest you'll pay. Use the tabs below to see a quick comparison for the same loan amount.

Amortisation in Action: An Example Scenario

Let's look at a common amortization example: a $300,000 loan at 6.5% interest on a 30-year schedule. The chart below visualizes how the principal and interest portions of your payment change over time.

Notice how the blue "Interest Paid" area dominates in the early years, while the green "Principal Paid" area grows significantly toward the end of the loan.

Strategies to Pay Off Your Mortgage Faster

This calculator demonstrates the secret weapon for homeowners: extra principal payments. By adding even a small amount to your monthly payment, you can dramatically shorten your loan term and save thousands. Here are the most common strategies:

  • Make Extra Monthly Payments: Consistently adding a small amount—even $50 or $100—to your regular payment can shave years off your loan.
  • Make a One-Time Lump Sum Payment: If you receive a bonus, inheritance, or tax refund, applying it directly to your principal can make a huge dent in your loan balance and future interest payments.
  • Use a Bi-Weekly Payment Plan: By paying half your mortgage every two weeks, you'll make 26 half-payments a year, which equals 13 full monthly payments. That one extra payment goes straight to principal.
  • Refinance to a Shorter Term: Switching from a 30-year to a 15-year mortgage will increase your monthly payment but save you a massive amount in total interest.

Is Paying Off Your Mortgage Early Always the Best Idea?

Being debt-free is a great goal, but sometimes your money can work harder elsewhere. Consider the "opportunity cost":

Tackle High-Interest Debt First

If you have debts like credit cards with high interest rates (>10%), paying those off first will almost always provide a better 'return' on your money than paying down a low-interest mortgage.

Consider Investment Returns

If your mortgage rate is very low (e.g., 3-4%), you could potentially earn a higher long-term return by investing your extra cash in the stock market (which has historically averaged 7-10%) instead.

Frequently Asked Questions

1

What does mortgage amortization mean?

Mortgage amortization is the process of paying off your home loan over time with regular, fixed payments. Each payment is split between principal (the amount you borrowed) and interest (the cost of borrowing). An amortization schedule shows you exactly how this split works for every payment.

2

How much of my payment goes to interest vs principal?

At the beginning of your loan, a larger portion of your payment goes toward interest because your loan balance is at its highest. As you pay down the balance, the interest portion shrinks, and more of your payment goes toward the principal. Our "Amortisation in Action" chart visualizes this shift perfectly.

3

How can I pay off my mortgage faster?

The most effective way is to make extra payments directly to the principal. This can be done by adding a little extra to your monthly payment, making a one-time lump-sum payment (like from a bonus), or switching to a bi-weekly payment schedule.

4

What’s the difference between amortized and interest-only loans?

An amortized loan (like the one this calculator models) includes both principal and interest in each payment, ensuring the loan is fully paid off by the end of the term. An interest-only loan requires you to pay only the interest for a set period, which results in lower initial payments but doesn't reduce your loan balance.

5

Can I change amortization terms mid-loan?

Yes, the most common way to change your amortization term is by refinancing your mortgage. For example, you could refinance a 30-year loan into a 15-year loan to pay it off faster, which will create a new amortization schedule.