1. What is Mortgage Repayment Calculator?

The Mortgage Repayment Calculator helps you understand your monthly mortgage payments and how making extra payments can reduce your loan term and total interest paid.

2. How Does the Calculator Work?

The calculator uses the standard mortgage formula:

Where:

• \( M \) — Monthly mortgage payment
• \( P \) — Principal loan amount
• \( r \) — Monthly interest rate (annual rate divided by 12)
• \( n \) — Number of payments (loan term in years multiplied by 12)

Explanation: The formula calculates the fixed monthly payment required to fully amortize a loan over its term.

3. Importance of Extra Payments

Details: Making extra payments toward your principal can significantly reduce the total interest paid and shorten your loan term. Even small additional amounts can make a big difference over time.

4. Using the Calculator

Tips: Enter your loan amount, interest rate, and term. Optionally add an extra monthly payment to see how it affects your repayment schedule. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How much can I save with extra payments?
A: The savings depend on your loan amount, interest rate, and how much extra you pay. Even $50-$100 extra per month can save thousands in interest.

Q2: Should I pay extra each month or make lump sum payments?
A: Regular extra payments have a greater impact on reducing term, but lump sums can also help. The calculator shows the effect of consistent extra payments.

Q3: Does this account for changing interest rates?
A: No, this calculator assumes a fixed interest rate for the entire loan term.

Q4: What's better - shorter term or extra payments?
A: A shorter term usually has a lower rate but higher required payments. Extra payments give you flexibility while still reducing interest.

Q5: Are there prepayment penalties?
A: Some loans have prepayment penalties. Check your loan terms before making extra payments.