How to Calculate Total Principal Paid on a Mortgage

Mortgage calculations break down your monthly payment to show how much interest and principal you pay each month. Interest gets calculated based on the outstanding amount of principal, so as your balance lowers, more of your payment gets applied to the principal rather than the interest.

Things You'll Need

• Amortization schedule
• Amount of initial principal
• Excel (optional)
• Pen
• Paper
• Calculator

Instructions

1. Use your amortization schedule, which shows your mortgage calculations. Most people receive an amortization schedule with their original loan papers. The schedule should show you the outstanding principal due after each monthly payment. Deduct this amount from the initial amount of your loan to find the total principal paid to date.

2. Enter your loan information into Excel and use preset formulas to find the principal paid. You need to know your interest rate, the term of the loan and the original principal. Formulas you'll use in Excel include PMT and PPMT.

3. Calculate the principal paid by hand. Assign values to the principal and to the monthly interest in decimal form. To find the monthly interest, divide the annual interest by 1200. You may want to write your equations down and use a calculator.

4. Know your monthly payment and if insurance and taxes get added into your monthly payment. You need to deduct those amounts from your monthly payment.

5. Multiply the principal by the monthly interest and deduct the amount form the monthly payment. This gives you the principal paid for that month.

6. Add the monthly principal to keep a running total of principal paid. Keep in mind that the lower your outstanding balance becomes the less interest you pay.

7. Pay your loan in full. When you finish paying your loan, your total principal paid equals the amount of the original principal.