1. What is a Mortgage Payment?

A mortgage payment is a regular payment made to pay off a home loan, typically consisting of principal and interest. The payment amount is determined by the loan amount, interest rate, and loan term.

2. How Does the Calculator Work?

The calculator uses the standard mortgage formula:

Where:

• \( P \) — Principal loan amount ($)
• \( r \) — Monthly interest rate (decimal)
• \( n \) — Number of monthly payments

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 homebuyers understand their financial commitments, compare loan options, and budget effectively for home ownership.

4. Using the Calculator

Tips: Enter the principal amount in dollars, monthly interest rate as a decimal (e.g., 0.005 for 0.5%), and loan term in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How do I convert annual rate to monthly?
A: Divide the annual percentage rate (APR) by 12 (months) and by 100 (to convert to decimal). For example, 6% APR = 0.06/12 = 0.005 monthly.

Q2: What's included in a typical mortgage payment?
A: This calculator shows principal and interest only. Actual payments may include taxes, insurance, and PMI.

Q3: How does loan term affect payments?
A: Shorter terms mean higher monthly payments but less total interest paid. Longer terms lower monthly payments but increase total interest.

Q4: What's the difference between fixed and adjustable rates?
A: Fixed rates stay the same for the entire term, while adjustable rates can change after an initial fixed period.

Q5: How much can I borrow?
A: Lenders typically use debt-to-income ratios (28/36 rule) - housing costs ≤28% and total debt ≤36% of gross income.