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 budget accordingly.

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 payment amount that will pay off the loan balance with interest over the specified term.

3. Importance of Mortgage Calculation

Details: Understanding your mortgage payment helps with financial planning, comparing loan options, and determining affordability.

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 only principal and interest. Your actual payment may include property taxes and insurance (PITI).

Q2: What's a typical mortgage term?
A: Most mortgages are 15 or 30 years, but other terms are available.

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

Q4: Can I calculate payments for different scenarios?
A: Yes, try different amounts, rates, and terms to see how they affect payments.

Q5: Is this calculator accurate for all loan types?
A: This works for standard fixed-rate mortgages. Adjustable-rate or interest-only loans require different calculations.