Frequently Asked Questions

How accurate are the calculator results?

Our calculators use standard financial formulas to provide highly accurate results. The calculations match those used by financial institutions for determining loan payments, interest, and amortization schedules. However, actual loan details may vary slightly depending on your lender's specific terms and conditions.

Do the calculators include taxes and insurance?

No, the payment calculations in our standard mortgage calculators show principal and interest only. Taxes and insurance are not included in the calculations unless specifically noted (such as in the Affordability Calculator where PITI - Principal, Interest, Taxes, and Insurance - is considered).

How do I save my calculation results?

You can save your results by using your browser's "Save As" function. This will save the entire page with your inputs and results. You can then reopen this file later to view your results or make adjustments. Alternatively, you can print the page using your browser's print function.

Are closing costs included in the calculations?

No, our standard mortgage calculators do not include closing costs in the calculations. Closing costs are one-time expenses paid at the closing of your real estate transaction and typically range from 2% to 5% of the loan amount.

What is a fixed-rate mortgage?

A fixed-rate mortgage has an interest rate that remains the same for the entire term of the loan. This means your principal and interest payment remains the same throughout the life of the loan, providing predictability for budgeting.

How is the monthly payment calculated?

The monthly payment is calculated using the loan amount, interest rate, and term. The formula ensures that the loan will be fully paid off at the end of the term through a process called amortization, where each payment is divided between interest and principal in varying amounts over time.

What happens if I enter different values for Payment and the other fields?

If you enter values for Loan Amount, Interest Rate, and Term, the calculator will compute the Payment. If you already know your payment and want to determine one of the other values, you can leave that field blank, enter the other values including the payment, and the calculator will compute the missing value.

What is an adjustable-rate mortgage (ARM)?

An adjustable-rate mortgage (ARM) has an interest rate that changes periodically, usually in relation to an index. Typically, an ARM starts with a lower fixed rate for a specified period (commonly 3, 5, 7, or 10 years), after which the rate adjusts at predetermined intervals.

How do rate caps work in ARMs?

Rate caps limit how much the interest rate can change. There are three types of caps:

1. Initial adjustment cap: Limits how much the rate can increase the first time it adjusts
2. Subsequent adjustment cap: Limits how much the rate can increase in subsequent adjustments
3. Lifetime cap: Limits how much the rate can increase in total over the life of the loan

In our calculator, these are represented by "Maximum Annual % Increase" and "Maximum Loan % Increase" fields.

How do I set up future rate changes?

In the Adjustable Rate section of the calculator, you can enter the expected interest rate for each year of the loan. If you're unsure of future rates, you can enter the maximum possible rate allowed by your loan terms for future years to see a "worst-case scenario" calculation.

How do additional principal payments affect my loan?

Additional principal payments reduce your loan balance faster, which means less interest accrues over time. This can significantly shorten the term of your loan and save you money on interest. Our calculator shows exactly how much time and money you can save by making additional payments.

What's the difference between one-time and recurring additional payments?

Our calculator allows you to model both types of additional payments:

• "Additional Principal" is for a one-time extra payment added to your current payment
• "Additional Principal - Whole Loan" allows you to set up recurring additional payments that are applied to all future payments starting from a specified payment number

How do I calculate what I need to pay to reach a specific payoff date?

Use the "Payoff Date" field to enter your desired payoff date, and the "Starting Payment #" field to indicate when you want to start making additional payments. The calculator will determine how much extra principal you need to pay each month to reach that payoff date.

What is the 28/36 rule mentioned in the calculator?

The 28/36 rule is a common guideline used by lenders to determine how much you can afford to borrow. It suggests that:

• Your housing expenses (PITI: Principal, Interest, Taxes, Insurance) should not exceed 28% of your gross monthly income
• Your total debt payments (including housing, car loans, credit cards, etc.) should not exceed 36% of your gross monthly income

Our Affordability Calculator uses these percentages by default, but you can adjust them based on your specific financial situation.

How do I determine how much house I can afford?

Enter your annual gross income, and the calculator will show you what mortgage payment and loan amount you can afford based on standard lending guidelines. You can adjust the percentages used for PITI and total debt to see how different lenders' requirements might affect your borrowing capacity.

Do I need an internet connection to use the calculators?

Once the calculator page has loaded in your browser, you do not need an internet connection to use it. All calculations are performed within your browser. If you save the page to your computer, you can use it offline anytime.

Are my calculations saved on your website?

No. As stated in our privacy notice, we do not store any of the information you enter. All calculations happen on your device only. If you want to save your results, you'll need to use your browser's Save As function or print the page.

The calculator isn't working properly. What should I do?

Try these troubleshooting steps:

1. Make sure you're using a modern, updated web browser
2. Clear your browser's cache and reload the page
3. Check that JavaScript is enabled in your browser settings
4. Ensure you've entered all required fields correctly
5. If problems persist, try using a different browser

Can I use the calculators on my mobile device?

Yes, our calculators are designed to work on both desktop and mobile devices. The interface will adapt to your screen size for optimal viewing and usage.