1. What is the House Payment Calculator?

The House Payment Calculator computes your monthly mortgage payment based on the loan amount, interest rate, and loan term. It uses the standard mortgage payment formula to determine your fixed monthly payment.

2. How Does the Calculator Work?

The calculator uses the mortgage 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: This formula calculates the fixed monthly payment required to fully amortize a loan over its term, including both principal and interest.

3. Importance of Mortgage Payment Calculation

Details: Understanding your monthly mortgage payment helps with budgeting, comparing loan options, and determining how much house you can afford.

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 the interest rate affect my payment?
A: Higher rates increase monthly payments significantly. A 1% rate difference can change payments by $100+ on a $300,000 loan.

Q3: What's better - 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.

Q4: How much can I borrow?
A: Lenders typically recommend housing payments not exceed 28% of gross monthly income.

Q5: Can I pay extra to reduce the loan term?
A: Yes, additional principal payments reduce total interest and can shorten the loan term significantly.