1. What is a Mortgage Loan Calculator?

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

Purpose: It helps homebuyers and borrowers estimate their monthly mortgage payments before committing to a loan.

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 payment needed to fully amortize the loan over its term.

3. Importance of Mortgage Calculation

Details: Accurate payment estimation helps borrowers budget effectively, compare loan offers, and determine affordable home prices.

4. Using the Calculator

Tips: Enter the loan amount, annual interest rate (as percentage), 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 the principal and interest payment (P&I). Your actual payment may include escrow items.

Q2: What's the difference between APR and interest rate?
A: The interest rate is the base cost of borrowing, while APR includes fees and other loan costs.

Q3: How does loan term affect payments?
A: Shorter terms mean higher monthly payments but less total interest paid over the loan life.

Q4: What's a typical down payment percentage?
A: Conventional loans often require 20%, but FHA loans may accept as little as 3.5%.

Q5: Can I calculate payments for adjustable-rate mortgages?
A: This calculator is for fixed-rate mortgages only. ARM payments can change over time.