1. What is the House Principal Calculator?

The House Principal Calculator computes your monthly mortgage payment using the standard loan payment formula. It helps you understand how much you'll pay each month, the total cost of the loan, and the total interest paid over the life of the loan.

2. How Does the Calculator Work?

The calculator uses the loan payment formula:

Where:

• \( PMT \) — Monthly payment
• \( P \) — Principal loan amount
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (loan term in years × 12)

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

3. Importance of Loan Calculation

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

4. Using the Calculator

Tips: Enter the loan amount in dollars, annual interest rate as a percentage (e.g., 3.5 for 3.5%), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

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

Q2: How does a larger down payment affect the payment?
A: A larger down payment reduces the principal (P), which directly lowers your monthly payment.

Q3: What's the difference between 15-year and 30-year mortgages?
A: Shorter terms have higher monthly payments but much less total interest paid over the life of the loan.

Q4: How does interest rate affect the payment?
A: Even small rate changes can significantly impact your monthly payment and total interest paid.

Q5: Are there other loan payment structures?
A: Yes, some loans have interest-only periods or adjustable rates, but this calculator assumes a standard fixed-rate mortgage.