1. What is a Mortgage Payment?

A mortgage payment is the monthly amount you pay to repay your home loan. It typically includes principal (the loan amount), interest, and sometimes taxes and insurance. This calculator focuses on the principal and interest components.

2. How Does the Calculator Work?

The calculator uses the standard mortgage payment formula:

Where:

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

Explanation: The formula accounts for the time value of money, calculating equal monthly payments that will pay off the loan plus interest over the term.

3. Understanding Your Mortgage

Details: Early in your mortgage, most of your payment goes toward interest. As you pay down the principal, more of each payment goes toward reducing the loan balance.

4. Using the Calculator

Tips:

• Enter the total loan amount (after down payment)
• Use the current annual interest rate (APR)
• Standard terms are 15 or 30 years
• Results show principal + interest only (not taxes/insurance)

5. Frequently Asked Questions (FAQ)

Q1: What's included in a typical mortgage payment?
A: Principal, interest, property taxes, and homeowners insurance (PITI). This calculator shows only principal and interest.

Q2: How does a larger down payment affect my payment?
A: A larger down payment reduces the principal (P), resulting in lower monthly payments.

Q3: What's the difference between interest rate and APR?
A: The interest rate is the cost of borrowing, while APR includes fees and other loan costs.

Q4: Should I choose a 15-year or 30-year mortgage?
A: 15-year loans have higher payments but lower total interest. 30-year loans have lower payments but cost more overall.

Q5: Can I reduce my interest costs?
A: Making extra principal payments or refinancing at a lower rate can reduce total interest paid.