1. What is a Mortgage Payment Calculator?

The mortgage payment calculator computes your monthly loan payment and shows how each payment is split between principal and interest over the life of the loan through an amortization schedule.

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)
• \( n \) — Total 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 fully amortizes the loan by the end of the term.

3. Understanding Amortization

Details: Amortization is the process of paying off debt over time through regular payments. Early payments consist mostly of interest, while later payments apply more toward the principal.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: How does a longer loan term affect payments?
A: Longer terms reduce monthly payments but increase total interest paid over the life of the loan.

Q2: What's the difference between principal and interest?
A: Principal is the loan amount borrowed, interest is the cost of borrowing that money.

Q3: How can I pay less interest overall?
A: Make additional principal payments when possible or choose a shorter loan term.

Q4: Does this calculator account for property taxes and insurance?
A: No, this calculates only the principal and interest portion of a mortgage payment.

Q5: What's the benefit of an amortization schedule?
A: It shows exactly how each payment affects your loan balance and helps plan prepayments.