Mortgage Calculator
Mortgage Payment Calculator
Mortgage Payment Formula:
Understanding Home Loans
A mortgage is a loan used to purchase a home, with payments spread over time. Understanding how mortgage payments are calculated helps buyers plan their finances and make informed decisions about homeownership, loan terms, and interest rates.
How Mortgage Payments Are Calculated
A mortgage payment typically includes:
Principal – The original loan amount.
Interest – The cost of borrowing, based on the interest rate.
Taxes & Insurance – Property taxes and homeowners insurance (often included in monthly payments).
Factors That Affect Mortgage Payments
Loan Term – A 15-year mortgage has higher payments but less interest paid over time.
Interest Rate – Lower rates reduce overall cost, while higher rates increase payments.
Down Payment – A larger down payment lowers the loan amount and monthly payments.
Using a Mortgage Calculator
Instead of manual calculations, a mortgage calculator can quickly estimate payments based on loan amount, interest rate, and loan term. This helps homebuyers compare options, budget for homeownership, and plan their finances more effectively.