Amortization Schedule Mortgage

Amrtization schedule mortgageIf you own real estate, whether it be a home or a business premises you will need to mage your investment. For most of us to buy any kind of real estate will require taking out a mortgage loan.

A mortgage loan is one of the biggest debts we will ever take on, so it’s always a good idea to keep a track of things.  Paying off a mortgage can take up to 25 – 30 years of you life and taking up a large amount of your salary.

However it is possible to shorten the term by making additional payments, this will, over time chip away at the bulk of the debt. You can monitor your progress using amortization schedule to track payments, interest and balance of the remaining debt.

What is an Amortization Schedule Mortgage?

Not to be confused with a mortgage calculator, an amortization schedule an accounting record or a table/chart of the periodic progress of mortgage loan payments, showing the loan payments, dates, amount of principal, interest and the balance owing after each payment until the loan is paid off – the final term. At the beginning of the schedule, the periodic payment is the same amount with the majority of each payment being the interest. As the schedule progress’s, a large bulk of each loan payment will cover the principal. The last row of the schedule shows the borrower’s total principal and interest payments for the total mortgage term.

The amortization table shows the percentage of payments that goes toward interest which reduces with each payment and the percentage that goes toward principal increases. For example, the first few entries of an amortization schedule for a $200,000 with a interest rate of 12% over 30-year mortgage based on a fixed-rate amortization starting June, 2017

(using an amortization formula):

where

Amortization schedule mortgage

  • r = rate per payment period
  • i = nominal annual interest rate
  • n = number of compounding periods per year
  • p = number of payment periods per year