1. What is a Fixed Mortgage Calculator?

The Fixed Mortgage Calculator computes the monthly payment for a fixed-rate mortgage based on the principal amount, interest rate, and loan term. It helps borrowers understand their payment obligations before committing to a loan.

2. How Does the Calculator Work?

The calculator uses the fixed monthly payment formula:

Where:

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

Explanation: The formula accounts for both principal repayment and interest charges over the life of the loan.

3. Importance of Mortgage Calculation

Details: Understanding your mortgage payments helps with budgeting, comparing loan offers, and making informed financial decisions about home purchases.

4. Using the Calculator

Tips: Enter the loan amount, annual interest rate, and loan term (in years or months). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between term in years vs months?
A: Years automatically converts to months (×12). For odd terms (like 2.5 years), using months (30) may be more precise.

Q2: Does this include property taxes and insurance?
A: No, this calculates principal and interest only. A complete mortgage payment often includes escrow for taxes and insurance.

Q3: How does interest rate affect payments?
A: Higher rates increase monthly payments significantly. A 1% rate increase on a $300,000 loan adds ~$180 to monthly payments.

Q4: What's amortization?
A: The process of paying off debt over time through regular payments. Early payments are mostly interest; later payments are mostly principal.

Q5: Are there other mortgage types?
A: Yes, adjustable-rate mortgages (ARMs) have variable rates, while interest-only loans defer principal repayment for a period.