Mortgage Calculator

How to Use This Calculator

To use the mortgage calculator, enter the purchase price of the home, the down payment amount, the interest rate, and the loan term in years. The purchase price is the total amount you will pay for the home, the down payment is the amount you pay upfront, and the interest rate is the rate at which you will be charged interest on the loan. For example, if you want to buy a home for $250,000 with a $50,000 down payment, an interest rate of 4%, and a 30-year loan term, you would enter these values into the calculator.

The Formula Behind It

The formula used to calculate the monthly mortgage payment is: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1], where M is the monthly payment, P is the principal loan amount, i is the monthly interest rate, and n is the number of payments. The principal loan amount is the purchase price minus the down payment, the monthly interest rate is the annual interest rate divided by 12, and the number of payments is the loan term in years multiplied by 12.

Practical Examples

• If you buy a home for $200,000 with a $40,000 down payment, an interest rate of 3.5%, and a 20-year loan term, the calculator would output a monthly payment of approximately $955.
• For a $350,000 home with a $70,000 down payment, an interest rate of 4.25%, and a 30-year loan term, the calculator would output a monthly payment of approximately $1,432.
• If you purchase a home for $150,000 with a $30,000 down payment, an interest rate of 3%, and a 15-year loan term, the calculator would output a monthly payment of approximately $1,072.

Common Questions

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

A fixed-rate mortgage has an interest rate that remains the same for the entire loan term, while an adjustable-rate mortgage has an interest rate that can change over time.

How does the down payment affect the monthly payment?

The down payment reduces the principal loan amount, resulting in a lower monthly payment.

Can I use this calculator for refinancing a mortgage?

Yes, you can use this calculator to determine the monthly payment for a refinanced mortgage by entering the new loan amount, interest rate, and loan term.

What is the impact of the interest rate on the monthly payment?

A higher interest rate results in a higher monthly payment, while a lower interest rate results in a lower monthly payment.

How does the loan term affect the monthly payment?

A longer loan term results in a lower monthly payment, but you will pay more in interest over the life of the loan, while a shorter loan term results in a higher monthly payment, but you will pay less in interest.