Mortgage
Calculator
Mortgage calculators are used to help a current or
potential
real estate
owner
determine
how much
they can
afford to
borrow to
purchase a
piece of
real estate.
Mortgage
calculators
can also be
used to
compare the
costs or
real
interest
rates
between
several
different
loans,
determine
the impact
on the
length of
the mortgage
loan of
making added
principal
payments or
bi-weekly
instead of
monthly
payments. A
mortgage
calculator
is an
automated
tool that
enables the
user to
quickly
determine
the
financial
implications
of changes
in one or
more
variables in
a mortgage
financing
arrangement.
The major
variables
include loan
principal
balance,
periodic
interest
rate
compound
interest,
number of
payments per
year, total
number of
payments and
the regular
payment
amount.
Mortgage
calculator
capability
can be found
on most
financial
calculators
such as the
HP-12C, in
most desktop
spreadsheet
programs
such as
Microsoft
Excel and on
the Web.
When
purchasing a
new home
most buyers
choose to
finance a
portion of
the purchase
price via
the use of
mortgage.
Prior to the
wide
availability
of mortgage
calculators,
those
wishing to
understand
the
financial
implications
of changes
to the five
main
variables in
a mortgage
transaction
were forced
to use
compound
interest
rate tables.
These tables
generally
required a
working
understanding
of compound
interest
mathematics
for proper
use. In
contrast,
mortgage
calculators
make answers
to questions
regarding
the impact
of changes
in mortgage
variables
available to
everyone.
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