1. What is a Mortgage Calculator?

A mortgage calculator helps you estimate your monthly mortgage payments based on the loan amount, interest rate, and loan term. It also shows how much interest you'll pay over the life of the loan.

2. How Does the Calculator Work?

The calculator uses the standard mortgage payment formula:

Where:

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

3. Understanding the Graph

The graph shows how your loan balance decreases over time. In the early years, more of your payment goes toward interest. As the loan matures, more goes toward paying down the principal.

4. Using the Calculator

Tips: Enter the loan amount in dollars, interest rate as a percentage (e.g., 4.5 for 4.5%), and loan term in years. The calculator will show your monthly payment and total interest costs.

5. Frequently Asked Questions (FAQ)

Q1: Does this include taxes and insurance?
A: No, this calculates principal and interest only. Your actual payment may include property taxes and insurance.

Q2: How can I pay less interest?
A: Making extra payments or choosing a shorter loan term reduces total interest.

Q3: What's the difference between 15-year and 30-year mortgages?
A: 15-year loans have higher monthly payments but much less total interest. 30-year loans have lower payments but more interest over time.

Q4: How does a higher interest rate affect my payment?
A: Even small rate increases can significantly raise your monthly payment and total interest.

Q5: Can I see an amortization schedule?
A: The graph shows balance over time. For a detailed schedule, use a full amortization calculator.