1. What is a Mortgage Calculator?

Definition: This calculator estimates monthly mortgage payments, total interest, and total payment amount based on loan principal, interest rate, and term.

Purpose: It helps homebuyers and homeowners understand their potential 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 (USD)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (term in years × 12)

Explanation: The formula accounts for both principal repayment and interest charges over the loan term.

3. Importance of Mortgage Calculation

Details: Accurate mortgage calculations help borrowers budget effectively, compare loan offers, and understand the true cost of borrowing.

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: Why does the calculator show more interest than principal?
A: In the early years of a mortgage, most of each payment goes toward interest due to amortization.

Q2: Does this include property taxes and insurance?
A: No, this calculates only principal and interest. Add about 1-2% of home value annually for taxes and insurance.

Q3: How does a higher interest rate affect payments?
A: Each 1% increase in rate typically increases payments by about 10-15% on a 30-year loan.

Q4: What's the benefit of a shorter loan term?
A: Shorter terms (e.g., 15 years) have higher payments but much less total interest paid.

Q5: How accurate is this calculator?
A: It provides standard estimates; actual loans may include additional fees or different compounding methods.