Mortgage Calculator

What is a Mortgage Calculator?
A mortgage calculator is a software program that is used to help homebuyers determine the monthly payment on a mortgage using principal, interest rate, and term as the variables. 

A mortgage calculator typically accepts the following data and calculates the monthly mortgage payments that are due:

• Price – the price of the home you wish to buy
• Percentage of Down Payment – the amount of money that you can make as down payment
• Length of Mortgage – the number of months/years it will take to pay off the loan 
• Annual Interest Rate – the interest rate on the mortgage 

Apart from finding your monthly mortgage rates, mortgage calculators can also help you calculate if you can afford a home, whether it makes sense to buy versus rent a home, refinance your home and other relevant mortgage information.

Following are some of the terms that you will need to know when working with mortgage calculators:
• Mortgage amount - Original or expected balance for your mortgage
• Interest rate - Annual interest rate for this mortgage
• Term in years - The number of years over which you will repay this loan. The most common mortgage terms are 15 years and 30 years.
• Monthly payment - Monthly principal and interest payment (PI).
• Total payments - Total of all monthly payments over the full term of the mortgage. This total payment amount assumes that there are no prepayments of principal.
• Total interest - Total of all interest paid over the full term of the mortgage. This total interest amount assumes that there are no prepayments of principal.
• Prepayment type - The frequency of prepayment. The options are: none, monthly, yearly, and one-time payment.
• Prepayment amount - Amount that will be prepaid on your mortgage. This amount will be applied to the mortgage principal balance, based on the prepayment type.
• Start with payment - This is the payment number that your prepayments will begin with. For a one time payment, this is the payment number that the single prepayment will be included in. All prepayments of principal are assumed to be received by your lender in time to be included in the following month's interest calculation. 
• Savings - Total amount of interest you will save by prepaying your mortgage.
• Amortization - Number of years it takes to repay the entire amount of the mortgage 

There are a number of web sites that lets you calculate your mortgage payments online. All you asked to do is simply enter the amounts asked for in the form and your payment is calculated and you get the answer instantaneously. But there is a caveat to almost all the calculators that you find online - The accuracy of this calculator and its applicability to your circumstances is not guaranteed. 

So, it is always a good idea to consult with a qualified professional before you make any purchases or loan commitments based on the results of the calculations by the mortgage calculators.