The mortgage amortization schedule is a table that details each monthly payment that you are required to make on your mortgage. As a borrower, it is very important for you to understand this schedule so that you are well informed about how your mortgage works, what the constituents of your monthly payments are, and what impact each payment has on the outstanding balance of your loan.
The mortgage amortization schedule is usually presented to you in a simple table format at the beginning of a mortgage. Each row of the table consists of information about a single monthly payment. The rows are arranged in a chronological order, so that the first row indicates the first payment, and the last row is the final payment that you will make on the mortgage. To fully comprehend the information provided in each row of the schedule, you need to understand what each column of the table stands for.
A typical mortgage amortization schedule consists of 5 major components:
Understanding these components of the schedule not only allows you to stay up to date with your mortgage, but also helps you in taking important decisions like refinancing your mortgage or changing its terms. The mortgage amortisation schedule is an important document, and you should go back to it every time your financial situation changes so that you can be proactive in making financially prudent choices.