Generally, amortization calculators work on the assumption that your interest rate is fixed and also that your payments are on time and equal. Delinquent payments or adjustable rates could possibly create a large difference between the estimate and actual amount. Also, if you are making one extra payment a year, the principal balance from year to year would change drastically from the principal on a loan without such a payment and you would need to use a calculator that allows you to enter that information. Many amortization calculators allow you to enter in an extra payment per year and show how much such a payment will affect your loan. Often, one extra payment a year can cut up to ten years from your loan.

Most amortization calculators work in this way: If you are buying your home for $160,000, and putting $10,000 down, your loan amount is $150,000. With a 7% fixed interest rate on $150,000 loan, your monthly payments will be $997. Some calculators can also tell you the following: the total interest on such a loan would be $209,263, the interest paid in the first year will be 10,451, in the second it will be 10,341, and monthly the average interest paid will be $581.

Amortization is the process of repaying your loan through monthly payments of the principal and interest. An amortization calculator can show you what these monthly payments will be. Use our amortization calculator to get an estimate on your monthly payments or fill out our free short form to contact up to four lenders about your mortgage.

The more information an amortization calculator gives you the more effective it will be. You can use this information to decide whether a longer term, a larger down payment, or an extra yearly payment is right for you. Use our amortization calculator to help you learn more about your new mortgage or apply online to contact a mortgage expert.