Question 1

How is the monthly mortgage payment calculated?

Accepted Answer

The formula uses standard amortization: M = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the total number of payments (years × 12). Each payment covers that month's interest first, with the remainder reducing principal.

Question 2

Does this calculator include property taxes and insurance?

Accepted Answer

No — this calculator shows the principal and interest (P&I) portion of your payment only. Your actual monthly payment will be higher when you include property taxes, homeowner's insurance, and possibly PMI (private mortgage insurance if your down payment is under 20%). Add roughly $200–$600/month for those costs depending on your location and home value.

Question 3

What's the difference between a fixed-rate and adjustable-rate mortgage?

Accepted Answer

A fixed-rate mortgage locks in your interest rate for the entire loan term, so your payment never changes. An adjustable-rate mortgage (ARM) starts with a lower rate that can change periodically after an initial fixed period (e.g., 5/1 ARM = fixed for 5 years, then adjusts annually). This calculator assumes a fixed rate.

Question 4

What factors affect my mortgage interest rate?

Accepted Answer

Your credit score is the biggest factor — scores above 740 get the best rates. Lenders also consider your loan-to-value ratio (LTV), debt-to-income ratio, loan type (conventional vs FHA vs VA), loan term, and current market conditions. A 1% rate difference on a $300,000 loan over 30 years changes your total interest paid by roughly $60,000.

Mortgage Calculator

How to use the Mortgage Calculator

Frequently Asked Questions

Mortgage Calculator

How to use the Mortgage Calculator

Frequently Asked Questions

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