Question 1

What is a mortgage amortization schedule?

Accepted Answer

An amortization schedule is a complete table showing every payment over the life of your loan. Each row shows how much of your payment goes to principal (reducing the balance) and how much goes to interest (the lender's fee). In early years, most of each payment is interest — this shifts toward principal over time as the balance decreases.

Question 2

How do extra payments affect my mortgage?

Accepted Answer

Extra payments go entirely to principal, reducing your balance faster than the standard schedule. Even an extra $100–$200/month can shave several years off a 30-year mortgage and save tens of thousands in interest. The earlier you make extra payments, the more impact they have since interest is calculated on the remaining balance.

Question 3

How is my monthly mortgage payment calculated?

Accepted Answer

Your monthly P&I payment is calculated using the standard amortization formula: M = P × [r(1+r)ⁿ] / [(1+r)ⁿ−1], where P is the loan amount, r is the monthly interest rate, and n is the total number of payments. This formula ensures your balance reaches exactly zero at the end of the loan term.

Question 4

When does my loan balance fall below 80% LTV?

Accepted Answer

Your loan-to-value ratio (LTV) falls below 80% when your remaining balance is less than 80% of the original home value. At 80% LTV, you can request PMI cancellation on a conventional loan. The amortization table shows your balance each month so you can identify exactly when this happens.

Question 5

Can I pay off my mortgage early?

Accepted Answer

Yes — most conventional, FHA, and VA loans have no prepayment penalty. You can make extra payments at any time, and they reduce your principal directly. Some older loans (and many jumbo loans) may have prepayment penalties during the first 3–5 years, so check your loan documents before making large lump-sum payments.

Amortization
Calculator

Frequently Asked Questions

AmortizationCalculator

Frequently Asked Questions

Amortization
Calculator