How to Calculate a Mortgage Balance After 5 Years

An amortization table will tell you your mortgage balance after each payment is made, as well as the principal and interest included in each payment. The table is created based on a payment amount determined by an algebraic formula that takes into account the loan value, the term of the loan and the annual percentage rate (APR). Another algebraic formula can be used to directly calculate the remaining balance on the loan after any amount of time.

Things You'll Need

• Scientific or engineering calculator

Instructions

1. Calculate the number of payments that will be made over five years. Most of the time, it will be 12 payments per year for five years, or 60 monthly payments.

2. Calculate the interest rate between payments by dividing your loan APR by the number of payments per year. For example, a loan paid monthly at 6 percent APR would have a monthly rate of 0.06/12, or 0.005.

3. Use these values, along with the loan value, to fill in the following equation:

   B = V[(1 + n)^t - (1 + n)^p]/[(1 + n)^t - 1]

   B = Ending balance

   V = Loan value ($200,000 in this example)

   n = Interest rate (0.005)

   t = Term of the loan (360 months for a 30-year mortgage)

   p = Number of payments calculated (60)

4. Solve the equation:

   B = 200,000[1.005^360 -- 1.005^60] / [1.005^360 -- 1]

   B = 200,000[6.023 -- 1.345] / 5.023

   B = $186,263.19