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 term.

Purpose: It helps homebuyers and homeowners understand their potential mortgage payments and plan their finances accordingly.

2. How Does the Calculator Work?

The calculator uses the 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 over its term with interest.

3. Importance of Mortgage Calculation

Details: Accurate mortgage calculations help borrowers understand affordability, compare loan options, and budget for homeownership costs.

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 and insurance (PITI).

Q2: What's a typical mortgage term?
A: Most common terms are 15 or 30 years, though other options may be available.

Q3: How does interest rate affect payments?
A: Higher rates increase monthly payments significantly over the life of the loan.

Q4: Is this for fixed-rate mortgages only?
A: Yes, this calculator is designed for traditional fixed-rate mortgages.

Q5: How accurate is this calculator?
A: It provides precise calculations for principal and interest, but actual loan terms may vary slightly.