How Do I Calculate Mortgage Payment, Interest and Principal?

Each time you send a mortgage payment to your lender, you pay a portion of your interest and a portion of your principal. The proportion changes every month, with the amount going toward principal slowly but surely increasing. Fortunately, you don't have to be a math whiz to calculate your mortgage payment along with a breakdown of your principal and interest. Just use a basic mortgage calculator online and pull up an amortization chart. If you want, you can save the resulting chart to a spreadsheet program for future reference as you pay off the loan.

Step 1

Calculate the mortgage terms using Your Mortgage Calculator. Enter your terms (rate, initial amount of the loan and term) and check the box for "Show me the calculations and amortization" if you want to see the interest and principal breakdown. The results show you the payment with and without estimated private mortgage insurance (PMI), as well as the cost, including estimated property taxes. Read the interest and principal paid each month in the amortization chart at the bottom. The tool also shows you exactly how it came to these results with basic mortgage formulas.

Step 2

Use CNN Money's Mortgage Estimator tool to calculate payment, interest and principal. In addition to entering the basic terms, you can manually enter your yearly property taxes and insurance to get a more accurate estimate of what you'll pay each month for your new home. Keep in mind that the calculator assumes a 30-year loan and an estimated amount for PMI (if applicable to your situation). View the total principal and interest payment on the same page.

Step 3

Enter your mortgage information into the tool at the My Amortization Chart website. The tool displays your estimated payment, total interest, total principal paid back and a full amortization table showing your breakdown of principal and interest every year. You can also set the chart to display your payments by month instead of by the year.

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