1. What is a Bankrate Monthly Mortgage Calculator?

Definition: This calculator determines the fixed monthly payment for a mortgage loan based on principal amount, interest rate, and loan term.

Purpose: It helps homebuyers and homeowners understand their monthly mortgage obligations and compare different loan scenarios.

2. How Does the Calculator Work?

The calculator uses the standard mortgage formula:

Where:

• \( M \) — Monthly payment (USD)
• \( P \) — Loan principal amount (USD)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (loan term in years × 12)

Explanation: The formula accounts for both principal and interest payments over the life of the loan.

3. Importance of Mortgage Calculation

Details: Accurate mortgage calculations help borrowers budget effectively, compare loan offers, and understand the long-term cost of home financing.

4. Using the Calculator

Tips: Enter the loan amount, annual interest rate (as a percentage), and loan term in years. All values must be > 0.

5. Frequently Asked Questions (FAQ)

Q1: Does this include property taxes and insurance?
A: No, this calculates only principal and interest. Your actual payment may include escrow for taxes and insurance.

Q2: What's the difference between APR and interest rate?
A: The interest rate is the cost of borrowing, while APR includes fees and other loan costs.

Q3: How does loan term affect payments?
A: Shorter terms mean higher monthly payments but less total interest paid over the life of the loan.

Q4: Can I calculate payments for adjustable-rate mortgages?
A: This calculator is for fixed-rate mortgages only. ARMs require different calculations.

Q5: How accurate is this calculator?
A: It provides standard mortgage payment estimates. Actual lender offers may vary slightly.