# How to use Finance101 amortization calculator

So, when you launch the calculator, it opens up in the Amort (or Amortization) view in the Finance101 calculator.
Below is a sample screen.

I chose the numbers on the screen for a specific reason. The simple fact that any 15 year fixed conventional mortgage that has a rate of 4.625% or less will always be paying more on the principle than in interest from the very first payment. I mention this particularly because several folks that I’ve talked to over the years often state how they simply pay their mortgage every month and don’t actually pay attention to the amount of interest that they are paying because they believe that they will be paying MOSTLY interest (no questions asked) for the first 15-20 years.
The truth of the matter is that if you can actually get a 30 year fixed conventional mortgage at a rate of 2.25% or less, and you will be paying more toward the principle than towards interest from the very first mortgage payment. Don’t believe me, try it on other calculators that are readily available online.

Finance101 amortization form

You will see the basic information that most homeowners who have a mortgage usually refer to: Loan amount, Interest rate, Term (in months), and when the first payment is to be made. When you are entering the first payment date (month and year), you need to use the plus (‘+’) key to add one to the year, and the minus (‘-’) key to subtract 1 from the year. The other fields like the amount borrowed or the interest rate, you can type them in with or without commas (‘,’) or decimals (‘.’). Currently it doesn’t switch them if you’re in some of the European countries that would show \$50,000.00 like this \$50.000,00.

Just below those field, you’ll see 3 additional fields which shows you: Total paid (the total of all the payments which includes the original amount borrowed), Break-even payment (the payment # that you will be paying more toward the principle than in interest), Principle vs Interest (the payment # that you will pay more principle down than you pay in total interest at that point). The reason I put the last 2 fields is because I felt that people could put their own mortgage information in and see what rate & term could work out better for them financially – if they wanted or could afford to.

On the bottom you will see a list of the payments made, and how each payment breaks down for this payment (principle and interest), and the total up to that payment (example: total interest paid or total principle paid), and the balance owed once that payment is made.

Just to the right of the fields you’ll see buttons that allow you click on to see annual information, or to add prepayments and/or mortgage rate changes (for Adjustable Rate Mortgages or ARMs). The annual information is based on the calendar year, and can be helpful to find out how much mortgage interest may be tax deductible over any given year. If you click on “view annual Chart”, you’ll be able to easily return to the monthly view by simply clicking the exact same button that is now labelled “view monthly Chart”.

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