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Mortgage Calculator Today

Mortgage Payment Formula:

\[ M = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

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1. What is a Mortgage Calculator?

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

Purpose: It helps homebuyers and homeowners understand their potential mortgage payments and compare different loan options.

2. How Does the Calculator Work?

The calculator uses the standard mortgage formula:

\[ M = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Where:

Explanation: The formula calculates the fixed monthly payment required to fully amortize the loan over its term.

3. Importance of Mortgage Calculation

Details: Accurate mortgage calculations help with budgeting, loan comparison, and financial planning for home purchases.

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: What's included in the monthly payment?
A: This calculates principal and interest only. Your actual payment may include taxes, insurance, and PMI.

Q2: How is interest calculated monthly?
A: The annual rate is divided by 12 to get the monthly rate (e.g., 6% annual = 0.5% monthly).

Q3: Does this work for other loans?
A: Yes, it works for any fixed-rate amortizing loan (car loans, personal loans, etc.).

Q4: How does loan term affect payments?
A: Shorter terms mean higher monthly payments but less total interest paid.

Q5: What's the difference between total payment and total interest?
A: Total payment includes both principal and interest, while total interest is just the interest portion.

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