1. What is a Mortgage Lender Calculator?

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

Purpose: It helps borrowers understand their monthly mortgage obligations and compare different loan options.

2. How Does the Calculator Work?

The calculator uses the 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, including both principal and interest.

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, 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 principal and interest. Your actual payment may include escrow for taxes and insurance.

Q2: How does the interest rate affect my payment?
A: Higher rates increase monthly payments significantly. A 1% rate difference can change payments by $50-$100 per $100,000 borrowed.

Q3: What's better - 15-year or 30-year mortgage?
A: 15-year loans have higher payments but much less total interest. 30-year loans have lower payments but cost more overall.

Q4: How do points affect my rate?
A: Each point (1% of loan amount) typically reduces your rate by 0.25%. Use our Mortgage Points Calculator to analyze this.

Q5: 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.