How the Mortgage Amortization Calculator works
Estimate mortgage payments, total interest and payoff cost. Adjust the inputs above, then use the calculate button to generate a fresh estimate based on the numbers you entered.
The result is designed to give you a quick planning number, plus a short breakdown of the major figures behind it. You can reset the form at any time and try a different scenario.
When to use this calculator
Use this mortgage amortization calculator when you want to understand the full cost of a mortgage over time. It is helpful for comparing loan amounts, interest rates and amortization periods before choosing a mortgage structure.
Formula
Monthly payment = principal x monthly rate / (1 - (1 + monthly rate)^(-number of payments))
- Principal is the mortgage amount borrowed.
- Monthly rate is the annual interest rate divided by 12.
- Number of payments is the amortization period in years multiplied by 12.
Worked example
For a $400,000 mortgage at 5% over 25 years, the calculator estimates the monthly payment, total repayment and total interest over the full amortization.
Common mistakes
- Looking only at the monthly payment and ignoring total interest.
- Using the contract term as the amortization period.
- Assuming the rate will stay the same at every renewal.
FAQs
What does amortization mean?
Amortization is the length of time used to calculate payments until the mortgage is fully repaid.
Is amortization the same as the mortgage term?
No. The term is the current contract period, while amortization is the full repayment schedule.
Why does a longer amortization cost more?
A longer amortization usually lowers monthly payments but keeps interest accruing for more years.