1. What is a Mortgage Calculator?

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

Purpose: It helps homebuyers and real estate professionals determine affordable mortgage payments and compare loan options.

2. How Does the Calculator Work?

The calculator uses the standard mortgage formula:

Where:

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

Explanation: The formula calculates the fixed monthly payment that would pay off the mortgage with interest over the specified term.

3. Importance of Mortgage Calculation

Details: Accurate mortgage calculations help borrowers understand their financial commitments and make informed home-buying decisions.

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

Q2: What's a typical interest rate?
A: Rates vary by market conditions, borrower credit, and loan type. Current averages range from 6-8% (as of 2023).

Q3: How does loan term affect payments?
A: Shorter terms (15 years) have higher monthly payments but lower total interest. Longer terms (30 years) have lower payments but higher total interest.

Q4: What if I make extra payments?
A: Additional payments reduce principal faster, saving interest and potentially shortening the loan term.

Q5: Are there other mortgage types?
A: Yes, this calculator is for fixed-rate mortgages. Adjustable-rate mortgages (ARMs) have different payment structures.