Question 1

How is monthly mortgage payment calculated?

Accepted Answer

Monthly payment = P × [r(1+r)^n] / [(1+r)^n – 1], where P is the loan principal, r is the monthly interest rate (annual rate / 12), and n is the total number of payments (years × 12).

Question 2

How much can I save by making extra mortgage payments?

Accepted Answer

Even small extra payments can save thousands in interest and shave years off your loan. For example, adding $200/month to a $300k 30-year mortgage at 6.5% can save over $100k in interest and pay off ~7 years early.

Question 3

What is an amortization schedule?

Accepted Answer

An amortization schedule is a table showing each monthly payment broken down into principal and interest portions, along with the remaining balance after each payment. Early payments are mostly interest; later payments shift toward principal.