1. What is the Payment On House Formula?

The payment on house formula calculates the fixed monthly payment required to fully amortize a loan over its term. This is the standard formula used for fixed-rate mortgages.

2. How Does the Calculator Work?

The calculator uses the standard 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 principal repayment and interest charges, with payments structured so the loan is paid off exactly at the end of the term.

3. Importance of Mortgage Calculation

Details: Understanding your monthly payment helps with budgeting and determining how much house you can afford. It also shows how interest rates and loan terms affect your payments.

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 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 loan amount (P), which directly lowers your monthly payment.

Q3: What's the difference between 15-year and 30-year mortgages?
A: 15-year loans have higher monthly payments but much less total interest. 30-year loans have lower payments but more total interest.

Q4: How do interest rates affect payments?
A: Higher rates increase monthly payments significantly. A 1% rate difference can change payments by $50-$100 per $100,000 borrowed.

Q5: Can I calculate payments for adjustable-rate mortgages?
A: This calculator is for fixed-rate loans only. ARM payments change when rates adjust.