# Loan Vs Mortgage Calculator

Loan and mortgage decisions are crucial aspects of personal finance. Whether you are considering a loan or a mortgage, understanding the financial implications is vital. To assist you in this process, we have developed a Loan Vs Mortgage Calculator.

Formula: The calculator utilizes the formula for mortgage payments: �=��(1+�)�(1+�)�−1M=P(1+r)n−1r(1+r)n​, where �M is the monthly payment, �P is the loan amount, �r is the monthly interest rate, and �n is the number of payments.

How to Use:

1. Enter the loan amount.
2. Input the interest rate.
3. Specify the loan term in years.
4. Click the “Calculate” button.

Example: Suppose you want to borrow \$100,000 with an interest rate of 5% over 30 years. After entering these values and clicking “Calculate,” the calculator will provide the monthly payment.

FAQs:

1. Q: What is the difference between a loan and a mortgage? A: A loan is a sum of money borrowed for a specific purpose, while a mortgage is a type of loan used to finance the purchase of real estate.
2. Q: How is the interest rate calculated? A: The interest rate is usually expressed annually but needs to be converted to a monthly rate for the calculator using annual rate12×10012×100annual rate​.

Conclusion: Making informed financial decisions is crucial when it comes to loans and mortgages. The Loan Vs Mortgage Calculator simplifies this process, allowing you to compare and understand the monthly payments associated with different borrowing scenarios. Use this tool to empower your financial planning and make confident decisions.