What is a Mortgage Balance?

Definition of a Mortgage Balance

A mortgage balance is the full amount owed at any period of time during the duration of the mortgage, and is the sum of the remaining principal owing and accrued interest.

A mortgage balance is used when calculating the equity in a home. The mortgage balance is deducted from the market value of the home to determine the equity.

Example of Mortgage Balance

Mr. McGillicuddy takes out a $200,000 mortgage at 5% interest. The mortgage balance when the mortgage is taken out is $200,000.

Mr. McGillicuddy has made 2 years of timely payments and if the outstanding principal is $194,159.69, and there is $800.74 in accrued interest, the mortgage balance will be $194,060.43.

Use of Mortgage Balances

Knowing your mortgage balance is usually the first step in refinancing, selling your home or obtaining a home equity loan. The lender will request a copy of your most recent mortgage statement to confirm your balance and calculate the available equity in your home.

Need help figuring out your mortgage balance? Contact us anytime!

Knowing your Mortgage Balance

On at least an annual basis, mortgage borrowers will receive a mortgage statement that will identify their mortgage balance, along with the amount of payments made and the interest charged. If a person cannot wait for a mortgage statement to obtain their mortgage balance, they may contact the mortgage holder to obtain an up to date figure, but the mortgage holder may charge a fee for providing this information.These days, many lenders offer the ability to keep track of your mortgage online and a statement detailing your current mortgage balance can be generated from your online account.

If a borrower desires to keep track of their mortgage balance, there is software available to help you do this. In addition, First Foundation provides several different types of free mortgage calculators for use.

  • Simply place your original mortgage terms in the boxes indicated, including the original mortgage amount, interest rate, and amortization period and the mortgage calculator will calculate your monthly payment.
  • Then, choose the the report called Amortization Schedule By Period and click “view report”.
  • You will see a table giving the mortgage balance based upon the number of payments made. If you know when your mortgage payments began, you can simply count the number of months you have been paying. (If you are currently 2 years and 3 months into your mortgage you should be on payment 27, if you are 3 years into your mortgage, you should be on payment 36 and so on).
  • Note, if you missed a payment or were late with a payment, it will affect the mortgage balance.

At First Foundation, we are happy to provide our clients with calculators and tools to keep track of their current financing and plan for the future.

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If you are interested in learning more about your Mortgage Balance, please feel free to contact us today!

Last updated Feb 11, 2019