1. What is a Mortgage Calculator?

Definition: This calculator estimates monthly mortgage payments based on loan amount, interest rate, and loan term.

Purpose: Helps homebuyers and homeowners understand their potential mortgage payments and compare loan options.

2. How Does the Calculator Work?

The calculator uses the standard mortgage formula:

Where:

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

Explanation: This formula calculates the fixed monthly payment required to fully amortize a loan over its term.

3. Importance of Mortgage Calculation

Details: Accurate mortgage calculations help borrowers budget effectively, compare loan offers, and understand the long-term cost of home financing.

4. Using the Calculator

Tips: Enter the loan amount, current interest rate (check today's rates), and loan term (typically 15 or 30 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 often do mortgage rates change?
A: Rates can change daily based on market conditions. Check today's rates for accuracy.

Q3: What's better - 15-year or 30-year mortgage?
A: 15-year has higher payments but less interest. 30-year has lower payments but more total interest.

Q4: How does down payment affect the calculation?
A: Subtract your down payment from the home price to get the loan principal (P).

Q5: Are there other mortgage types?
A: Yes, this calculator is for fixed-rate mortgages. ARMs and other loans have different calculations.