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 loan term.

Purpose: It helps homebuyers and homeowners understand their potential mortgage payments and plan their budgets 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 accounts for both principal and interest payments over the life of the loan.

3. Importance of Mortgage Calculation

Details: Accurate mortgage calculations help borrowers understand affordability, compare loan options, and make informed financial decisions.

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 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 interest rate?
A: Rates vary by market conditions, credit score, and loan type. Check current rates from lenders.

Q3: How does loan term affect payments?
A: Shorter terms (15 years) have higher monthly payments but less total interest. Longer terms (30 years) have lower monthly payments but more total interest.

Q4: What's the difference between APR and interest rate?
A: The interest rate is the cost of borrowing, while APR includes fees and other loan costs.

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