How to Figure Out How Much Is Left on a Mortgage
When you make your monthly mortgage payment, only a helping of that money actually goes toward paying off the lend. Part of the payment is matter to on the money you ‘ve borrowed ; if it ‘s silent fairly early in the term of your mortgage, matter to will be a huge ball of your payment. That makes it hard to figure out at a glance merely how much is left on your mortgage.
probably the simplest way to find out how much is left on your mortgage is to check your mortgage statement. Look for an item labeled “ principal balance. ” That ‘s how much you actually owe, and the interest you pay is charged on that sum. If your symmetry is n’t on your argument, call your mortgage ship’s company and ask for your principal balance. Or you can do the mathematics yourself using the same recipe the lender used to determine your payment.
To calculate the star libra on your mortgage, you ‘ll need three pieces of information. First is the total of your stream monthly payment for chief and interest. many homeowners pay their property taxes and hazard indemnity premiums as part of their mortgage payments ; if you do this, do n’t include the tax and indemnity portions in the calculations. The second piece of data is the annual matter to rate you ‘re paying on your mortgage. If you ‘re in a fixed-rate mortgage, it ‘s the rate you ‘ve been paying all along ; if your mortgage has an adjustable pace, it ‘s whatever you ‘re paying right now. The concluding morsel of required data is how many months remain on your mortgage.
Lenders use a extra formula called an amortization formula to set your monthly payment. This formula can besides be used to determine your star counterweight at any indicate. The recipe goes like this : b = ( PMT/R ) x ( 1 – ( 1/ ( 1+R ) ^N ) In the formula, “ B ” is the principal counterweight, “ PMT ” is the monthly payment for principal and sake and “ N ” is the act of months remaining. “ R ” is your sake pace, but it ‘s expressed as a monthly pace rather than an annual one. To get the monthly pace, just take your annual rate, expressed as a decimal, and divide it by 12. If your annual rate is 6 percentage, for example : R = 0.06/12 = 0.005.
Say you have a 30-year mortgage with a monthly requital of $ 1,450. Your annual rate is 6 percentage and you have made 10 years ‘ worth of payments, then you have 240 payments left. Therefore, PMT is 1,450, N is 240 and R is 0.06/12, or 0.005. Plug them into the formula : B = ( 1450/0.005 ) x ( 1 – 1 ( 1.005^240 ) ) B = 290,000 x 0.6979 B = 202,391 You have about $ 202,391 left on your mortgage. That visualize is slenderly murder due to rounding for the sake of exemplification. Using a calculator gives you an accurate figure : $ 202,392.12.
amortization calculators widely available on the Internet are designed for people planning to purchase a home, but you can use them to determine your star balance, besides. On these calculators, users enter the mortgage sum they want to borrow, their annual interest pace and the duration of their mortgage, and the calculator figures the monthly payment. To use one to find your current libra, enroll your interest pace and the number of months remaining on your mortgage. then use test and error in the space for the mortgage measure. Tweak this name until the requital produced by the calculator matches your own payment. When it does, the number you ‘ve entered is your current balance.
- Corporate Finance: The Core, Second Edition; Jonathan Berk and Peter DeMarzo
- Bankrate: Mortgage Amortization Calculator
Cam Merritt is a writer and editor program specializing in occupation, personal finance and home plan. He has contributed to USA Today, The Des Moines Register and Better Homes and Gardens ” publications. Merritt has a journalism degree from Drake University and is pursuing an master in business from the University of Iowa.