1. What is the Home Loan Calculator?

The Home Loan Calculator computes your monthly mortgage payments and generates an amortization table showing how each payment is split between principal and interest over the life of your loan.

2. How Does the Calculator Work?

The calculator uses the standard loan 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 calculates the fixed monthly payment required to fully amortize a loan over its term, accounting for both principal and interest.

3. Importance of Loan Calculation

Details: Understanding your mortgage payments helps with budgeting and financial planning. The amortization table shows how much of each payment goes toward paying down the principal versus paying interest.

4. Using the Calculator

Tips: Enter the loan amount in dollars, annual interest rate as a percentage (e.g., 3.5 for 3.5%), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between principal and interest?
A: Principal is the amount you borrowed. Interest is the cost of borrowing that money, calculated as a percentage of the remaining principal.

Q2: Why does more interest get paid early in the loan?
A: Early payments have more interest because the outstanding balance is higher. As you pay down principal, less interest accrues each month.

Q3: How can I pay less interest overall?
A: Make extra principal payments, choose a shorter loan term, or secure a lower interest rate to reduce total interest paid.

Q4: What's included in a typical mortgage payment?
A: This calculator shows principal and interest only. Actual payments may include property taxes, insurance, and PMI if applicable.

Q5: How does a lower rate affect my payment?
A: Even a small rate decrease can significantly reduce your monthly payment and total interest over the life of the loan.