Amortization Schedule

An amortization schedule is a table providing information such as the amount of principal, interest and the balance of the debt in regular instalments over a period of time.

If you were to keep everything the same, term, amount, rate, etc. but extended the amortization, this will lower your monthly payments. For example assuming a $100,000 mortgage for 5 years at 2.99% would require monthly payments of $472.73. If you extended the amortization out to 30 years, your payment drops to $420.07.

Having a longer amortization could potentially allow you to borrow more for your mortgage. As with the previous example, a 30 year amortization could allow someone to borrow $110,000 with monthly payments of $462.08. Depending on the product and term you may have to qualify at a shorter amortization and a higher rate (IE. HELOC’s, shorter terms, and variables)

By making accelerated payments or extra payments also helps to not only reduce your overall balance, it also takes time off your amortization.

CLICK HERE for a PDF sample of what an Amortization Schedule looks like for a 5 year (60 month) term with a 25 year amortization.