**Comprehensive Mortgage Calculator**

**For All
Loans**

**Loan Amount:** The amount you
borrow.

**Interest Rate:** The annual
interest rate the lender charges you for borrowing the
money.

**Fraction Helper:** The Fraction
Helper is optional. If you have been quoted an interest rate
of, say, 6^{7}/_{8}, you
could use the Fraction Helper to find out that
^{7}/_{8} is the
same as .875. When you select a fraction from the
Fraction Helper, the decimal portion of the interest rate
is automatically changed to the selected value.

**Extra Amount Each
Payment:** Adding a little extra to your
payments can save big money, especially over long term loans
such as home mortgages. Entering a number here lets you see how
much you could save if you were able to consistently put that
much extra into each of your payments.

**Make Payments:** Select how often
you will make payments on the loan. The majority of loans have
monthly payments, so monthly is pre-selected for you. However,
this calculator is also able to handle weekly, biweekly (every
2 weeks - 26 payments per year), bimonthly (twice a month - 24
payments per year), quarterly (every 3 months), semiannual
(every 6 months), and annual Payment Schedules.

Note:

If you choose bimonthly and print a Payment Schedule, the calculator will choose 2 days of the month to make payments. One of the days will be the day of the First Payment Date. The other day will be 15 days after that or before that, depending on how late in the month the first day is. For example, if the first payment is on the 20th of the month, the 2 payment dates will be the 5th and the 20th. If the first payment is on the 15th of the month, the 2 payment dates will be the 15th and the 30th. This calculator does not allow for payments on the 16th and 31st. It will choose the 1st and the 16th instead.

**First Payment Date:** This is the
date your first payment is due. It is only used for printing
the Payment Schedule. If you are not going to print a Payment
Schedule, you can leave this blank. If you leave this blank and
print the Payment Schedule, the calculator will assume the
first payment is due today.

**How many years to pay off the
loan?** Enter the number of years you will be
making payments. Negative numbers are automatically changed to
positive numbers. The number of months is automatically updated
when you change the number of years. You can enter a decimal
number of years - but if you do, it will be converted to a
number of months, and the number of months will be converted
back to a decimal number of years. So the decimal you enter may
not be the decimal you get!

Example

If you enter 12.7 years, this translates into 152 months. 152 months translates back to 12.67 years, so 12.67 would be the number you get!

**Or, how many months to pay off the
loan?** Sometimes it's easier to enter the
number of months you'll be making payments. If you know this
number, you can enter it instead of the number of years. The
number of years is automatically updated when you change the
number of months. The number you enter is rounded to the
nearest whole number. Negative numbers are automatically
changed to positive numbers.

**For Home Mortgages**

**PLEASE NOTE:** All
mortgage calculations for this calculator assume a conventional
fixed interest rate loan. For other mortgage types, such as
adjustable rate mortgages (ARM's) or FHA loans, actual figures
**WILL** differ, and you should use these results
only as "ballpark" figures!

One of the most common uses for a loan calculator is to find
out the payment you'd have to make on a home mortgage. For most
people this is their largest budget item, so it is useful to
know as precisely as possible what amount to budget for. The
loan payment covers the principal plus interest amount for the
home itself, but homes come with property taxes, and there is
often mortgage insurance, and these two items are frequently
bundled into the loan payment. You'll also need hazard
insurance, which may also be bundled into your payments.
Finally, townhome and condominium dwellers will have to pay
association dues (the association dues may cover your hazard
insurance). The portion of your payment that does not pay for
principal and interest is deposited into an escrow account, and
when payments are due, the mortgage company pays the bill from
the funds in your escrow account. This calculator accounts for
taxes, mortgage insurance, hazard insurance, and association
dues, so there are no harsh surprises when you find out what
you *really* need in your budget!

**Annual Property Tax:** Enter the
yearly amount you can expect to pay for property taxes. Your
realtor should be able to give you this information, as it is
commonly a part of the MLS listing for the property. You should
expect that over time your property tax will increase.

**Annual Mortgage Insurance
(PMI):** If you paid less than 20% down on
your home, you'll probably have to pay mortgage insurance.
Enter the amount of mortgage insurance you will have to pay
each year. Do not confuse mortgage insurance with hazard
insurance! Mortgage insurance is something you pay for to
protect the lender in the event you default on your loan. This
may sound like a sweet deal for the lender and a raw deal for
you, but in fact, mortgage insurance makes it possible for
lenders to give you a home loan without requiring a large down
payment. With conventional loans, you generally can cancel your
mortgage insurance once you have paid 20% of the loan or you
can show by a property assessment that you have 20% equity in
your home. Once you have 20% equity, the lender has a pretty
good chance of recouping their investment through a foreclosure
sale if you default on the loan. The qualifications for
cancelling your mortgage insurance may vary from these general
rules, and the rules ** are** different
for FHA loans! Check with your lender for details, and plan to
cancel it just as soon as possible. Apply the extra money to
your loan payments, if you can, and over time you'll save a
bundle in interest!

**Annual Hazard Insurance:** This is
what you normally think of as your home insurance. It covers
losses due to fires, storms, flooding, etc.

**Annual Association Dues:** If you
are planning to purchase a townhome or condominium or a PUD,
you will have association dues to pay in addition to your other
home-related expenses. Exactly what the dues pay for varies
from development to development and whether it's a condo,
townhome, or PUD; but the following are
typical: hazard insurance, major maintenance and
repairs (roofing, siding, cement, asphalt, landscaping,
swimming pools, nautilus equipment, playgrounds, tennis courts,
etc.), lawn care, snow removal, management company fees, legal
fees, and so on. Your realtor should be able to provide you
with dues information.

**Show me the Payment
Schedule:** The Payment Schedule is also
known as an Amortization Schedule. If you are not an AOL user,
the Payment Schedule is generated locally and quickly displays
in a new browser window. If you are an AOL user, the Payment
Schedule must be generated on our server, which takes a little
longer. The Payment Schedule shows you how much of each payment
goes to principal and how much pays interest to the lender.
You'll be able to see how your loan balance declines. At the
end of each year there's a summary showing totals for that year
and totals for the life of the loan so far. To print the
Payment Schedule on your printer, click "File" on your browser
menu, then click "Print."

**Frequently Asked
Questions**

**How come the results on the calculator do not always
match up with the totals at the end of the Payment
Schedule?**

The Calculator and Payment Schedule calculations are very
different. The calculator simply plugs numbers into a formula
and returns a result. The Payment Schedule has its own formula
which is repeated for each payment. Thus, the Payment Schedule
accumulates error as it goes along. The accumulated error
results from the periodic interest rate, which is equal to the
yearly rate divided by the number of payments per year. This
can result in repeating decimals (e.g., 8% annually is .6666...
monthly). Applying such a number to 360 separate calculations
in a 30 year mortgage schedule accumulates error, compared to
using it once in the formula calculation. For example, suppose
your computer is able to store a maximum of 5 decimal places.
Then monthly payments on an 8% loan would be calculated using
.66667, which is *just slightly* too big, so a bit too
much interest is shown by the end of the schedule. On a 4%
loan, .33333 would be used, which is now *just slightly*
too small, so a bit too liitle interest is shown by the end of
the schedule.

Note:If at the end of a Payment Schedule there is a small amount of principal left over, presumably due to accumulated error such as described above, the Payment Schedule shows an extra line. On a 30-year loan with monthly payments, this would be the "361st payment." The Payment Schedule displays this extra linein italicsso that you can see the principal add up to the loan amount.

**On the Payment Schedule, sometimes the loan balance
for one month does not equal the loan balance from the previous
month minus the principal paid. It's off by a penny. What's
up?**

You can probably see the answer to this one coming a mile off:
It's due to rounding error again. As the Payment Schedule is
generated, results are displayed rounded to two decimal places,
but internally are kept with more than 2 decimal places. For
example:

In the example, everything looks correct as you go from left to right: each number is rounded correctly. But in the Display column, the subtraction appears to be wrong! Don't worry though, the internal calculation is correct!InternalDisplayPrevious Balance1275.246 1275.25Principal Paid-125.123-125.12New Balance1150.123 1150.12(Not 1150.13!)

Legalese:
This calculator is provided as a public service
to all Internet users on an "as is" basis. Use it
at your own risk! Although reasonable attempts
have been made to ensure the calculator operates
as intended, no warranty of any kind is made as
to the fitness or suitability of the calculator
for its intended purpose. Neither the author nor
the web site owner shall be held liable for any
failure of the calculator to perform as expected,
nor held liable for any inability to access or
use the calculator due to any communications
failure, site down time, browser incompatibility,
user misunderstanding, etc. This calculator
requires a JavaScript-capable browser. However,
no guarantee is made that this calculator will
work correctly with any specific browser's
JavaScript implementation. |

Development feedback and enhancements are welcome!

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