1. What is Mortgage Payment Calculation?

The mortgage payment calculation determines the fixed monthly payment required to fully repay a home loan over its term, including both principal and interest.

2. How Does the Calculator Work?

The calculator uses the standard mortgage payment formula:

Where:

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

Explanation: The formula accounts for compound interest over the life of the loan, calculating a fixed payment that will pay off the loan exactly by the end of the term.

3. Importance of Amortization

Details: Understanding your amortization schedule helps you see how much of each payment goes toward principal vs. interest, and how your loan balance decreases over time.

4. Using the Calculator

Tips: Enter the total loan amount, annual interest rate (as a percentage), and loan term in years. The calculator will show your monthly payment and generate a complete amortization schedule.

5. Frequently Asked Questions (FAQ)

Q1: What's included in the monthly payment?
A: This calculation includes principal and interest only. Your actual payment may include property taxes, insurance, and PMI if applicable.

Q2: How does interest rate affect payments?
A: Higher rates significantly increase monthly payments and total interest paid over the life of the loan.

Q3: What's the benefit of a shorter loan term?
A: Shorter terms (e.g., 15 years) have higher monthly payments but much less total interest compared to longer terms (e.g., 30 years).

Q4: Can I see how extra payments affect my loan?
A: This calculator shows the standard amortization. For extra payment scenarios, use an advanced amortization calculator.

Q5: Are there other mortgage types?
A: This calculator is for fixed-rate mortgages. Adjustable-rate mortgages (ARMs) have different payment structures.