How Mortgage Calculations Work
The monthly payment is calculated using: M = P × [r(1+r)^n] / [(1+r)^n - 1] where P = loan amount, r = monthly interest rate, n = total number of payments.
Frequently Asked Questions
How much down payment do I need?
Conventional loans typically require 20% to avoid PMI. FHA loans can go as low as 3.5%. VA and USDA loans may require 0% down.
How do extra payments save money?
Extra payments go directly to principal, reducing the balance faster. This means less interest accrues over the life of the loan. Even $100 extra per month can save thousands.
Does this include property tax and insurance?
No, this calculator shows principal and interest only. Add property tax, homeowners insurance, and PMI separately to estimate your total monthly housing cost.