What is a Mortgage?

A mortgage is a loan used to purchase real estate where the property serves as collateral. The loan is repaid over time with interest through regular monthly payments.

When to Use This Calculator

• Estimating monthly mortgage payments for home buying
• Comparing different loan offers and interest rates
• Understanding the total cost of a mortgage over time
• Planning your budget for homeownership expenses

Formula

The monthly payment is calculated using the formula:

M = P[r(1+r)^n]/[(1+r)^n - 1]

Where:

• M = Monthly payment
• P = Loan principal
• r = Monthly interest rate (annual rate / 1200)
• n = Total number of payments (years × 12)

Examples

Example 1: $200,000 loan at 6% for 30 years → $1,199.10/month

Example 2: $300,000 loan at 4.5% for 15 years → $2,295.29/month