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 plan their finances accordingly.

2. How Does the Calculator Work?

The calculator uses the standard mortgage 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 calculates the fixed monthly payment required to fully amortize the loan over its term.

3. Importance of Mortgage Calculation

Details: Understanding your mortgage payment helps with budgeting, loan comparison, and determining how much house you can afford.

4. Using the Calculator

Tips: Enter the loan amount, current interest rate (check Citi's latest rates), and loan term (typically 15 or 30 years). All values must be > 0.

5. Frequently Asked Questions (FAQ)

Q1: Does this include taxes and insurance?
A: No, this calculates principal and interest only. Your actual payment may include escrow for taxes and insurance.

Q2: How often do mortgage rates change?
A: Rates can change daily. Check Citi's current rates for the most accurate information.

Q3: What's the difference between 15-year and 30-year mortgages?
A: 15-year loans have higher payments but lower interest rates and total interest paid. 30-year loans have lower payments but higher total costs.

Q4: Can I calculate payments for adjustable-rate mortgages?
A: This calculator is for fixed-rate mortgages only. ARM payments may change after the initial fixed period.

Q5: How can I reduce my monthly payment?
A: Consider a larger down payment, shorter loan term, or improving your credit score to qualify for lower rates.