Mortgage Calculator
Mortgage calculator is an essential financial tool that helps homebuyers estimate their monthly mortgage payments.
What Is a Mortgage Calculator?
A mortgage calculator is an essential financial tool that helps homebuyers estimate their monthly mortgage payments. By inputting key details like loan amount, interest rate, and loan term, you can quickly determine what you’ll pay each month—including principal, interest, taxes, and insurance (PITI).
Why Use a Mortgage Calculator?
✅ Budget Smartly – See if a home fits your financial situation before buying.
✅ Compare Loan Options – Adjust terms (15-year vs. 30-year) to find the best fit.
✅ Plan for Extra Costs – Factor in property taxes, PMI, and homeowners insurance.
✅ Save Money – Test how extra payments shorten your loan term and reduce interest.
How Does a the Calculator Work?
Most calculators use this standard formula to compute monthly payments:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
- M = Monthly payment
- P = Principal loan amount
- i = Monthly interest rate (annual rate ÷ 12)
- n = Number of payments (loan term in years × 12)
Key Inputs Needed:
- Home Price – Purchase price of the property.
- Interest Rate – Current mortgage rate (fixed or adjustable).
- Loan Term – Typically 15, 20, or 30 years.
- Taxes & Insurance – Estimated annual costs (optional).
Related Financial Calculators:
1️⃣ Refinance Calculator – Discover if refinancing could lower your payments or save interest.
2️⃣ Debt-to-Income (DTI) Calculator – Calculate how your home loan affects your complete debt situation.
3️⃣ Home Affordability Calculator – Determine how much house you can realistically afford.