1. What is the Yahoo Mortgage Calculator?

The Yahoo Mortgage Calculator uses the standard mortgage payment formula to calculate monthly mortgage payments based on loan principal, interest rate, and loan term. It provides accurate payment estimates for home buyers and homeowners.

2. How Does the Calculator Work?

The calculator uses the mortgage payment formula:

Where:

• \( P \) — Loan principal amount (USD)
• \( r \) — Monthly interest rate (decimal)
• \( n \) — Total number of payments (months)

Explanation: This formula calculates the fixed monthly payment required to fully amortize a loan over its term, including both principal and interest components.

3. Importance of Mortgage Calculation

Details: Accurate mortgage payment calculation is essential for budgeting, comparing loan offers, and understanding the total cost of homeownership. It helps borrowers make informed financial decisions.

4. Using the Calculator

Tips: Enter the loan amount in USD, monthly interest rate as a decimal (e.g., 0.005 for 0.5%), and loan term in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How do I convert annual interest rate to monthly?
A: Divide the annual rate by 12. For example, 6% annual rate = 0.06/12 = 0.005 monthly rate.

Q2: Does this include property taxes and insurance?
A: No, this calculates only the principal and interest portion. Property taxes, insurance, and PMI would be additional costs.

Q3: What is a typical loan term?
A: Common terms are 15 years (180 months) and 30 years (360 months), but other terms are available.

Q4: How does extra payments affect the loan?
A: Extra payments reduce the principal faster, shortening the loan term and reducing total interest paid.

Q5: Are there different types of mortgage calculations?
A: Yes, this calculator uses the standard amortizing loan formula. Other types include interest-only loans and adjustable-rate mortgages.