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 budgets accordingly.

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 accounts for both principal and interest payments over the life of the loan.

3. Importance of Mortgage Calculation

Details: Accurate mortgage calculations help borrowers understand affordability, compare loan options, and make informed financial decisions.

4. Using the Calculator

Tips: Enter the loan amount, current interest rate (check Zillow Mortgage Rates for today's rates), and loan term (typically 15 or 30 years).

5. Frequently Asked Questions (FAQ)

Q1: Does this include property 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 Zillow Mortgage Marketplace for current rates.

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 interest.

Q4: How does down payment affect the calculation?
A: Down payment reduces the principal amount (P) in the formula.

Q5: What's PMI and does this calculator include it?
A: Private Mortgage Insurance is required for loans with <20% down. This calculator doesn't include PMI.