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 when planning to purchase or refinance a home.

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 loan over its term, including both principal and interest.

3. Importance of Mortgage Calculation

Details: Understanding your potential mortgage payment helps with budgeting, loan comparison, and determining how much house you can afford.

4. Using the Calculator

Tips: Enter the loan amount, annual interest rate (without % sign), 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 a typical mortgage term?
A: Most common terms are 15 or 30 years, but other terms (10, 20, 25 years) may be available.

Q3: How does interest rate affect my payment?
A: Higher rates increase monthly payments. Even a 0.5% difference can significantly impact your payment over the loan term.

Q4: What's principal vs. interest in payments?
A: Early payments are mostly interest; later payments apply more to principal. This is called amortization.

Q5: Can I calculate payments for different scenarios?
A: Yes! Try different loan amounts, rates, and terms to see how they affect your monthly payment.