1. What is a Mortgage Loan Calculator?

Definition: This calculator computes the fixed monthly payment for a mortgage loan based on principal amount, interest rate, and loan term.

Purpose: It helps borrowers understand their monthly mortgage obligations and compare different loan options.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( M \) — Monthly payment (USD)
• \( P \) — Loan principal (USD)
• \( r \) — Monthly interest rate (annual rate ÷ 12 ÷ 100)
• \( n \) — Number of payments (loan term in years × 12)

Explanation: The formula calculates the fixed payment amount that pays off the loan in full with interest by the end of the term.

3. Importance of Mortgage Calculation

Details: Accurate payment calculations help borrowers budget effectively, compare loan offers, and understand the long-term 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 positive numbers.

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

Q3: What's the difference between interest rate and APR?
A: APR includes both interest rate and loan fees, giving a more complete cost picture.

Q4: Can I calculate payments for different payment frequencies?
A: This calculator assumes monthly payments. Other frequencies require different calculations.

Q5: How accurate is this calculator?
A: It provides precise calculations for fixed-rate loans. Adjustable-rate mortgages require more complex calculations.