What is a Mortgage Calculator?
A mortgage calculator is a calculator that computes how much you will pay when yo have applied for a mortgage. 
This is the obvious answer. However, you can actually use Microsoft Excel as a mortgage calculator if you know the formula used in the computation of your payments. In fact, MS Excel 97 has a free template that automatically computes payments of mortgages. Also, know the variables before making your own mortgage calculator like interest rate and term of payment. The formula is actually simple and I will discuss it in greater detail in my other site – Math and Math Applications
Mortgage interest is money you pay in interest to the lender that holds your mortgage. Every month, a mortgagee pays an equal sum that always includes principal and interest. The principal is the amount that is applied towards the original loan amount. The interest is amount the lender is charging you to borrow the money.
In the first five to ten years of a mortgage, the mortgage interest accounts for well over half of the scheduled monthly payment. As the mortgage ammortizes, the amount applied to the principal grows and the amount being applied to the mortgage interest decreases. This is because, when the principal balance is lowered, the amount of mortgage interest also lowers.
A document called a truth in lending disclosure is provided to every mortgagee. This document outlines the mortgage interest rate, ammortization schedule, total mortgage interest, and total of all payments at the end of the mortgage term. The figures can be staggering when viewed for the first time.
There are different types of mortgage interest rates. A fixed rate applies to most mortgages, and simply means that whatever the interest rate is at closing, it is the mortgage interest rate that will apply for the life of the loan. A variable interest rate means the mortgage interest that is charged can fluctuate. Some variable rates remain fixed for a period of time and later become variable, while others start out as a variable rate and become fixed after a period of time. Standard mortgage interest rates change almost daily and vary slightly from lender to lender.
Unfortunately, there is no such thing an interest-free mortgage. However, primary mortgage interest is tax deductible up to 100% in many cases, and in some cases, mortgage interest from a second mortgage or equity loan is also tax deductible. By law, your mortgage company must provide you with a year-end statement every tax year declaring the amount of mortgage interest you paid. If you are paying mortgage interest on investment property, rental property, or another property that is not your primary residence, you should talk to a tax advisor to determine whether your mortgage interest is tax deductible.
One Response to "What is a Mortgage Calculator?"
November 7th, 2008 at 9:48 am
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