![]() This can be visually understood using our mortgage interest calculator. As the loan progresses, interest payments are smaller than principal repayment. Initially, a larger portion of the monthly mortgage payment is interest payment and less principal repayment. Interest per month keeps changing as more and more of the loan balance is paid off. Interest per month = Remaining Mortgage Balance * Mortgage Rate The above amortization formula provides both principal and interest, however, interest can be calculated separately also. ![]() Additionally, if you have an interest-only compoonent in your mortgage, then try using an interest-only mortgage calculator for a more precise payment schedule. ![]() Use our amortization calculator to try more examples and learn more about the amortization process. The following amortization calculation includes both principal repayment and interest. The formula used to calculate the monthly payment using amortization is as follows: Amortization is the process that takes a loan and determines the equal periodic payments that are made to repay the principal and additional interest on the loan. The first step is to calculate the principal and interest using amortization.
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