- Mortgage amount
- The total dollar amount for this mortgage.
- Interest rate
- The interest rate on this mortgage.
- Mortgage amortization
- The number of years over which you will repay this loan. This calculator has two options. The 5/20 Interest Only option has a repayment period of 25 years. The first five years are interest only, the payment is then increased to fully payoff the loan balance over the remaining 20 years. The 10/15 Interest Only option has a repayment period of 25 years. The first 10 years are interest only, the payment is then increased to fully payoff the loan balance over the remaining 15 years.
- Fees included in the APR calculation. These fees can vary by lender but, at a minimum, usually includes prepaid interest.
- Annual percentage rate (APR)
- A standard calculation used by lenders. It is designed to help borrowers compare different loan options. For example, a loan with a lower stated interest rate may be a bad value if its fees are too high. Likewise, a mortgage with a higher stated rate and very low fees could be an exceptional value. APR calculations incorporate these fees into a single rate. You can then compare mortgages with different fees, rates or terms.
- Payment type
- The payment type determines the frequency of payments. Monthly will have 12 payments per year, weekly 52, bi-weekly 26 and bi monthly 24.
Accelerated weekly and accelerated bi-weekly payment options are calculated by taking a monthly payment schedule and assuming only four weeks in a month. The tool calculates an accelerated weekly payment, for example, by taking your normal monthly payment and dividing it by four. Since you make 52 weekly payments, by the end of a year you have paid the equivalent of one extra monthly payment. This additional amount accelerates your mortgage payoff by going directly against your mortgage's principal. The effect can save you thousands in interest and take years off of your mortgage.
The accelerated bi-weekly payment is calculated by dividing your monthly payment by two. You then make 26 bi-weekly payments. Just like the accelerated weekly payments you are in effect paying an additional monthly payment per year.
- Equivalent monthly payment
- The amount that you are effectively paying each month for this mortgage. For loans with monthly payments, this is simply the monthly payments. For all other payment types, this is the sum of your payments for one year divided by 12.
- Mortgage payment
- Periodic principal and interest payment using semi-annual compounding.