Keeping a Personal Mortgage Calculator

If the nerd in you comes out as soon as someone starts talking numbers, you might find yourself wondering how hard it is to create a mortgage calculator. Technically called an amortization calculator, the numbers you put into the calculation tell you what your payment each month breaks down to in terms of what goes to the principal (the amount to pay down your loan) and interest (the money the lender makes for loaning you the money).

Getting set up

You can download a spreadsheet to fill in for Excel or Numbers. If you don’t use Excel or Numbers, you can create one in Google sheets (a free online spreadsheet program with a Google account). You will also need a few numbers to set up your amortization schedule.

• The loan amount. This is the amount you intend to borrow. So, in general, it will be the amount of the sales price of the home minus the down payment. It might include some of the closing costs or points, or other amounts so bear that in mind and adjust your calculator once you get the final numbers at closing.
• The annual interest rate. For a fixed-interest mortgage, this amount will remain the same throughout the life of the loan. For a variable interest or adjustable loan, each time the rate changes, you should set up a new table going forward.
• The loan period. Usually, you calculate this in years, so even if your loan is for a partial year, express it in decimals. So, fifteen years and six months would be 15.5.
• The number of payments per year. Usually, this number is 12 since you make payments every month. In rare cases or for particular types of loans, it could be 4 for quarterly payments or even one if you only pay one time each year.
• You also need the start date of the loan. Typically, loan calculators assume that the first payment is due at the beginning of the next month after the start date.
• Optional extra payments. Some calculators also have a formula for voluntary additional payments. For example, if you want to pay off your mortgage to coincide with your retirement, you could try various additional payments until the loan zeros out on that date. That way, you would know exactly how much extra to pay each month to achieve your goals.

These calculators do not account for taxes and insurance since those numbers are subject to change even though you pay them with your monthly payment. If you have questions about how to use a mortgage calculator or how to figure out what your payments might be, speak with your lender for a detailed explanation.