Mortgage Calculator

Step 1: Mortgage Loan Amount, Mortgage Annual Interest Rate, Mortgage Term

Loan Amount ($):
Annual Interest Rate:
Mortgage Term (Number of Years):

Step 2: Optional Additional Monthly Mortgage Principal Payment
If you want to pay additional fixed amount of mortgage principal each month in order to reduce the number of years to pay your mortgage and to reduce the total mortgage interest, enter that amount here; otherwise, leave it blank:

Additional monthly mortgage principal payment ($):

Step 3: Click   to see the monthly mortgage payment and amortization table.

This free loan calculator can be used to calculate the total monthly payment of the principal and the interest for any amortized loans including home mortgages, car loans, etc. This loan calculator also calculates monthly payment for interest only loans such as interest only home mortgage loans. After you click the "Calculate" button, scroll down to the bottom of the page to see the total interest paid at the end of the term of the loan or the monthly payment of an interest only loan.

This free mortgage calculator can help you plan your next mortgage application, your next mortgage refinance or keep track of your current mortgage.

This free mortgage calculator calculates monthly mortgage payment (principal plus interest). Furthermore, an mortgage amortization table is displayed after you enter the mortgage loan amount, the mortgage interest rate, the mortgage term (number of years), and click the "Calculate" button. In addition to the principal and interest that you pay each month, the mortgage amortization table also shows the total mortgage interest paid so far, the total mortgage principal paid so far and the remaining balance at the end of each month.

This mortgage calculator is easy to use: you just need to enter three numbers (or four numbers if your are interested in knowing the effect on the total interest, etc. of making additional monthly principal payment) and click "Calculate"; then the monthly mortgage payment amount and the mortgage amortization table is shown on this page based on the numbers you entered.

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Important Information About This Calculator:

This calculator calculates periodic fixed-amount payments for basic fixed-rate loans. This calculator's assumptions include that payments are made at each month's end. Tax is not considered in this calculator at all. Origination fees and points are not considered in this calculator either. We hope you have found this mortgage loan calculator useful and will visit this calculator site again.

The following is for the curious ones.

What is under the hood in the mortgage calculators?

Under the hood of the mortgage calculators is the "time value of money" formula:

Time value of money
   1. PV is the value at time=0
   2. FV is the value at time=n
   3. i is the rate at which the amount will be compounded each period
   4. n is the number of periods (not necessarily an integer)
Using that formula, one can write many calculators including mortgage calculators, bond calculators, etc. The key is to convert the intermediate and beginning values into corresponding future values and to use the fact that the net cash flow should be zero to write the equation and to solve it for the unknown.

In the case of mortgage calculator (for fixed rate mortgages), the compounding is done monthly and i = (mortgage annual interest rate)/12. This rate is easy to understand because it is a quoted rate.

In the case of bond calculator, the interest rate is called the "prevailing interest rate" or "internal rate of return". It is a subjective concept because it is an estimate by an estimator. Each person may have his own estimate of the so-called "prevailing interest rate". The aggregate effect of those economics actors' estimation and action result in the real variable prevailing interest rate that is observable only after the fact.

The "annualized rate of return" calculators also depend on the "time value of money" formula. There are some estimators that relate the "annualized rate of return" (geometric mean) to the "arithmetic mean rate of return". The "annualized rate of return estimator" is one example.

What is interest?

That question has perplexed human beings since the ancient times. Interest is a result of the inescapable fact of uncertainty and unknown of the future. Without uncertainty and unknown of the future, there would be no interest because human beings will value possessing a present good the same as they value possessing a future good. But that is very hard to imagine because that is contrary to the fact of the human condition which includes the uncertainty and unknown of the future. Facing the uncertainty and unknown of the future, human beings want to cling to what they possess now instead of loaning it out and receiving it in the future the outcome of which is uncertain and unknown. If a person does want to loan what he possess now out, he expects receiving a "premium" in addition to the original loan amount or loaned object from the debtor when the loan has matured in the uncertain and unknown future. In that case, he values possessing the premium plus the loan principal that he will receive in the future more than he values possessing the principal now. That "premium" is interest.

What is interest rate?

The ratio of the "premium" to the principal over a fixed period of time is interest rate. For each individual actor, his interest rate is subjective. The aggregate result of all the individual actors' subjective interest rates is the market interest rate which is objective.

Interest rate is usually expressed with money interest rate because in a market economy money not only is used as a medium of exchange but also serves an important purpose of enabling the calculation of money price. When money is paper or electronic bits and is produced and controlled by a coercive actor such as a government, the amount of produced money is manipulated by that coercive actor. In that case, the interest rate in the market does not fully reflect the non-money-producer actors value judgment any more; and the interest rate in the market becomes a false signal of those actors value judgment and a false signal of the availability or amount of capital goods and consumer goods and services.

When persons talk about interest rate, they usually talk about the interest rate as manipulated by the central banks. But in a totally free market, the interest rate is based on the availability or amount of capital goods and consumer goods and services, and the economic actors' subjective value judgments. Their value judgment includes their assessment of the uncertainty of the future. The more uncertain they perceive the future, the more unwilling they are to loan their money out and thus the high the interest rate they demand. But in a non-free economy, the central bank controls the amount of money in the market and thus it can produce more money in that kind of situation and thus bring down the interest rate in the market.

In summary, in a non-free economy, the interest rate contain two elements: 1) the interest rate as determined by the non-coercive economic actors' value judgment and the amount of available capital goods and consumer goods and services; 2) the amount of money as produced by the central bank.

In addition to the above two elements, the third element is the money substitutes such as checking accounts. Under a "fractional reserve banking" system, out of the checking accounts of the depositors who deposit their own money in the banks, the banks will create "bank credit". That bank credit is another way that the interest rate is moved away from the one that is determined by the non-coercive economic actors' value judgment and the availability and amount of capital goods and consumer goods and services.

Interest rate is highly related to money and bank credit. And those are the keys to understanding the causes of the economic crisis.

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