1. What is a Mortgage Loan Calculator?

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

Purpose: It helps homebuyers and borrowers understand their monthly mortgage obligations and the total cost of borrowing.

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)
• \( n \) — Number of payments (loan 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 long-term financial commitment.

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

Q3: What's the difference between interest rate and APR?
A: APR includes fees and other loan costs, while the interest rate is just the borrowing cost.

Q4: How often is interest calculated?
A: For most mortgages, interest is calculated monthly.

Q5: Can I use this for other loans?
A: Yes, it works for any fixed-rate amortizing loan (car loans, personal loans, etc.).