Amortization Chart Additional Payments

From LoveToKnow Mortgage

By using an online amortization chart, additional payments are easy to calculate. Online mortgage payoff calculators give you the opportunity to easily explore the time and interest savings of a wide variety of early payment options.

Paying Off Your Mortgage Early

You can pay off your mortgage early - and save yourself a lot of interest expense - if you make additional payments on your mortgage loan. The extra amount that you decide to pay will greatly affect the total amount of interest paid on the loan as well as the date when the loan will be paid in full.

A homeowner can decide to add an additional payment every month, yearly, or they might decide to make a one-time lump sum payment. One popular method is to add an additional 1/12 of a payment to each monthly payment. This basically simulates making an additional monthly payment once a year. Other homeowners determine how much they need to add each month in order to pay the loan off by a certain date.

Using an Amortization Chart: Additional Payments

It takes a lot of mathematical calculations to determine the dollar-impact of the early payments or to determine how much extra you need to add to your payment to pay off the loan by a certain date.

By using an amortization chart, additional payments are easy to estimate. An amortization chart will consider the interest rate and amortize (or spread) the payments over a period of time to determine when the loan will be paid off. Amortization charts are included in online mortgage payoff calculators.

Types of Mortgage Payoff Calculators

A mortgage payoff calculator is designed to help you calculate the amount of interest you would save if you pay off your mortgage early by making additional payments each month. There are many different calculator designs. Some are designed for simple payment calculations while others are able to do more complex calculations.

With most calculators you enter the:

  • Term of the loan (total number of years on the mortgage)
  • Number of years remaining on the mortgage loan
  • Amount of the mortgage loan
  • Interest rate
  • Additional payment you are thinking of making each month

For example, as shown below, a mortgage payoff calculator can reveal:

  • If you paid just an additional $50 each month, you could save $22,498 in interest and pay off your loan about 4 years early.
  • If you paid an additional $250 each month, you could save $61,151 in interest and pay off your loan about 12 years early.
Mortgage Savings
$100
Additional
Payment
$200
Additional
Payment
Total Years on Mortgage3030
Years Remaining on Mortgage2525
Amount of Mortgage$100,000$100,000
Annual Interest Rate7.5 %7.5 %
Additional Monthly Payment$50$250
Scheduled Monthly Payment$699$699
Accelerated Monthly Payment$749$949
Total Scheduled Payments$251,722$251,722
Total Accelerated Payments$229,224$190,571
Total Mortgage Savings$22,498$61,151
Years Saved on Mortgage4 years
2 months		11 years
11 months

If you are considering adding annual payments, or special payments on specific dates during the term of the loan, you should use a more complex mortgage calculator to analyze your potential savings. These calculators are just as easy to use as a simple mortgage calculator and use the same type of information.

For example, with a complex mortgage calculator you will need:

  • Term of the Loan (total number of years on the mortgage)
  • Number of years remaining on the mortgage loan
  • Amount of the mortgage loan
  • Interest rate
  • A choice of options for additional payments such as:
    • Monthly payments of a certain amount starting on a certain date
    • An extra payment of 1/12 of the regular monthly payment each month
    • Annual payments of a certain amount
    • One-time payments of different amounts over the term of the loan

Finding a Mortgage Amortization Calculator

There are a wide variety of mortgage amortization calculators available for use on many real estate, lending and money management websites. Most are rather simple to use and are offered free of charge.

Simple Calculators

Complex Mortgage Calculators

Fixed versus Adjustable

A mortgage payoff calculator works best with a fixed rate mortgage which does not have the potential interest rate fluctuations or rate caps that mau be experienced with an adjustable rate mortgage. You can certainly use a mortgage payoff calculator to get a general idea of the impact of additional payments, but you should talk with your lender to obtain a more accurate estimate.

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