Overview

Main Menu Name: Mortgage

Calculates the payment necessary to pay off a mortgage over a period of time at a given rate.

In this article:

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

Background

Before borrowing to finance, it is imperative that consumers or investors understand the extent of financial responsibility. "Shopping for a loan" reveals significant differences in both cost and terms for the same amount of borrowing.

For example, a $60,000 loan at 12% interest could be repaid 30-years with monthly payments of principal and interest of $617.17. The same loan at 13% interest requires monthly payments of $663.72. The difference in loan payments over a 30-year period would be $16,758.

Why should I use this calculator?

• To calculate the outlay on an installment loan.
• To compare the outlay given different rates of interest, principal amounts, or time periods.

Getting Started

Before borrowing to finance, it is imperative that consumers or investors understand the extent of financial responsibility. "Shopping for a loan" reveals significant differences in both cost and terms for the same amount of borrowing.

For example, a $60,000 loan at 12% interest could be repaid in 30 years with monthly payments of principal and interest of $617.17. The same loan at 13% interest requires monthly payments of $663.72.The difference in loan payments over a 30-year period would be $16,758.

Entering Data

1. Amount Borrowed:  Enter the amount of money borrowed.
2. Annual Interest Rate:  Enter the interest rate on the loan.
3. Calculate Payment?:  Select Yes to view the payment amount due (annually, semiannually, quarterly, and monthly) necessary to amortize the loan over a given period of time. Select No to view how a payment would be split up between the interest and the principal if you chose a fixed monthly payment.
4. Length of Mortgage (Years):  This entry field will not appear unless you choose "Yes" for the "Calculate Payment?" entry field. If this field is active, enter the number of years that the mortgage will last.
5. Fixed Monthly Payment:  This entry field will not appear unless you choose "No" for the "Calculate Payment?" entry field. If this field is active, enter the desired fixed monthly dollar amount paid towards the mortgage.

Results

The program provides two different result screens which depend on whether you chose Yes or No for the "Calculate Payment?" entry field.

If you choose Yes…: The program calculates the annual, semiannual, quarterly, and monthly payments necessary to amortize the loan over a given period of time.

If you choose No…: The program provides a schedule of fixed monthly payments. The payments are broken down by how much principal and interest is paid per payment.