Use this calculator to find out how much a fixed-rate mortgage will cost. Also find out the monthly payment of the mortgage you are considering. In other words, the calculator helps you understand the amortization of a fixed-rate mortgage.
Mortgage Amount: Enter the entire amount of the mortgage (the original principal). If you are going to add any fees, such as closing costs, to the mortgage, remember to enter the total amount of the mortgage in the field, not simply the home purchase price. The calculator lets you specify amounts between 100 and 1,000,000.
Interest Rate: the quoted rate of the mortgage.
Term: Enter the mortgage's current term. The current term is the amount of time you originally had to make payments, assuming you haven't already made additional payments to pay down the mortgage earlier. The term is determined at the time you take out the mortgage. The calculator lets you select from 1 to 30 years. (Thirty years is the most common term traditionally.)
Prepayments: whether you will make any extra payments beyond what the mortgage requires. The calculator only allows you to select either a one-time or yearly prepayment, not a monthly prepayment. There is a significant difference between yearly and monthly prepayments. Interest racks up during the year and not just year-to-year. So a yearly prepayment is worth less than if it had been spread out monthly over the preceding year, and worth more than if it were spread out over the following year. To see how monthly prepayments will affect your mortgage, use the Accelerated Mortgage Payoff Calculator.
Prepayment Amount: the amount of the individual prepayment. Even if the prepayment will be made yearly, only include the value of each yearly prepayment rather than the total value of all the prepayments together. The calculator will figure out the total value of all the prepayments including their effect on interest.
Start Prepayment in Year: if you plan on making a prepayment every year of the mortgage, enter 1. If you will start making yearly prepayments 5 years into the mortgage, enter 5. If you will only make a one-time prepayment, enter the year of the mortgage when you will make the prepayment. If you are making the prepayment before signing the mortgage, that does not count as a prepayment. Simply subtract the amount you are paying upfront from the Mortgage Amount.