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Mortgage Amortization Schedules

The following page explains the concept of mortgage amortization schedules as tools for helping you with your mortgage loan payments.

What Are Mortgage Amortization Schedules?

Mortgage amortization schedules are usually to be found in spreadsheets, in such packages as Microsoft Excel. A mortgage amortization schedule is the detailed plotting of mortgage repayments in order to amortize the mortgage loan. As such, mortgage amotization spreadsheets can be thought of as mortgage amortization calculators.

Mortgage amortization schedules can help to show you the precise financial impact of your monthly mortgae repayments. For example, you should be aware that for every payment you make against your mortgage loan, the amount that goes towards decreasing (amortizing) the principal can vary significantly: some of your mortgage repayments go towards amortization with the rest covering interest applied against the principal.

At first, the lion’s share of the repayments you make are taken up by the interest charges. As time passes a larger percentage of the repayment amortizes the mortgage loan amount itself. Thus over time the loan is repaid: consequently the mortgage is amortized.

A mortgage amortization schedule can help to outline the exact amount that you pay towards the mortgage principal and the interest upon it each time you make a payment.

How do Mortgage Amortization Schedules Work?

A mortgage amortization schedule runs chronologically: that is to say the schedule runs in a “time forward” fashion, either from the present date to a future date or a future date to another more distant future date. The first payment in the amrtization schedule will generally be considered to be a full payment period after the mortgage loan has been activated. This period is of course different from the very 1st day that the loan is activated (which is known as the mortgage loan amortization date).

The last payment is assumed to be the one that repays the principal, i.e. pays of or amortizes the mortgage. Oftentimes the payment amount that amortizes the mortgage loan can be different than the other repayments.

Main Benefits of a Mortgage Amortization Schedule

Mortgage amortization schedules can:

  • break down your repayments into principal and interest segments
  • show you the interest payments made to dat
  • show you how much of the principal you have paid to date
  • and the remainder of the balance of the principal for each payment date.

Check out some of our other articles for further information about mortgage amortization schedules.