The purpose of an amortization rate schedule is to help a borrower understand how much of his monthly payment goes toward paying interest and how much goes toward reducing his principal, explains Bankrate. It also helps him know the total principal and interest he has paid by a certain date.
Continue ReadingThe amortization rate schedule helps a borrower organize his finances by showing him how much principal he owes at any particular time, states Bankrate. He can use this information to figure out how much more money he has to pay every month to reduce his mortgage term. The borrower can also use the amortization rate schedule to figure out how much interest and principal he has paid so far and how much principal he still owes the bank. This helps him calculate his equity on the home.
Learn more about Credit & Lending