Overview

Main Menu Name: Compare

Calculates the monthly payment required to pay off a mortgage over a given period of time and at a given rate of interest. It also calculates the monthly payment, total interest, and total repayment for four percentage points both above and below the rate selected.

In this article:

• Background
• Why should I use this calculator?
• Getting Started
• Entering Data
• Results

Background

Before borrowing to finance, it is imperative that a consumer or investor understands the extent of financial responsibility. Furthermore, "shopping for a loan" reveals stark differences in cost and terms of loans.

For example, a $150,000 loan at 10 percent interest could be repaid over a 30-year period with monthly payments of principal and interest of $1,316.36. Total interest paid on the loan would be $323,890, and the total repayment costs would be $473,890. The same loan at 9 percent would require monthly payments of $1,206.93. Total interest would amount to $284,495 and the total repayment would be $434,495. At 11 percent the same loan would require $1,428.49 monthly payments. Total interest would be $364,256 and the total payments would amount to $514,256.

Why should I use this calculator?

• To determine the total cost of a mortgage.
• To compare the effects of different interest rates on monthly payments and total costs.
• To compare the effects of a 15-year mortgage to a 30-year mortgage.

Getting Started

Before borrowing to finance, it is imperative that a consumer or investor understands the extent of financial responsibility. Furthermore, "shopping for a loan" reveals stark differences in cost and terms of loans.

For example, a $150,000 loan at 10 percent interest could be repaid over a 30-year period with monthly payments of principal and interest of $1,316.36. Total interest paid on the loan would be $323,890, and the total repayment costs would be $473,890. The same loan at 9 percent would require monthly payments of $1,206.93. Total interest would amount to $284,495 and the total repayment would be $434,495. At 11 percent the same loan would require $1,428.49 monthly payments. Total interest would be $364,256 and the total payments would amount to $514,256.

Entering Data

1. Amount of Loan Principal:  Enter the dollar amount that is borrowed.
2. Annual Interest Rate:  Enter the annual interest rate on the loan.
3. Term of Loan (Years):  Enter the number of years given to repay the loan.

Results

The program calculates the monthly payment necessary to amortize the loan over a required period of time based on the given annual interest rate on the loan. The results also show monthly payments, total interest, and total repayment figures for interest rates above and below the rate that was entered in the Annual Interest Rate entry fields.