How we calculate

By the CalcLedger editorial team · Updated September 2026

All calculations run in your browser using standard financial formulas. Results are rounded to the nearest dollar for display. Where a guide uses an example, it uses these same formulas, and you can reproduce it with the matching calculator.

Loan and mortgage payments

Fixed-rate loans use the standard amortization formula, where P is the loan amount, r is the annual rate divided by 12, and n is the number of monthly payments:

Total interest is the monthly payment times n, minus P. If the rate is 0%, the payment is simply P ÷ n. Used in the loan, mortgage, and refinance calculators.

Full monthly housing cost

The mortgage calculator includes property tax, insurance, and HOA dues. It does not add PMI automatically. The affordability calculator adds PMI at the rate you enter whenever the down payment is under 20% of the price.

Home affordability

The affordability calculator finds the highest price where both debt-to-income limits hold:

Because the monthly cost rises in a straight line with the price, the maximum price can be solved exactly rather than estimated. The default limits are 28% and 36%, with options for 31%/43% and 36%/45%.

Refinance break-even and savings

The current payment is based on your balance, rate, and remaining years. Lifetime interest compares the remaining interest on your current loan with the total interest on the new loan. "Net savings over the years you keep it" adds the payment savings for that period and the difference in remaining balance at the end of it, then subtracts closing costs.

HELOC

During the draw period, the payment is interest-only: balance × annual rate ÷ 12. During repayment, the balance is amortized over the repayment period with the loan payment formula above. The calculator assumes the full amount is drawn at the start and the rate doesn't change. Real HELOC rates are usually variable.

Debt payoff

The debt payoff calculator simulates the balance month by month: each month, interest of balance × APR ÷ 12 is added and your payment is subtracted, until the balance reaches zero. If the payment doesn't exceed the first month's interest, the balance never goes down, and the calculator says so.

Compound interest

Here i is the annual rate divided by the compounding frequency, and m is the equivalent monthly rate for that compounding frequency. Contributions are assumed at the end of each month. Returns are not guaranteed; the result shows what a steady rate would produce.

Rental property returns

• Net operating income (NOI) = monthly rent − monthly operating costs, excluding the mortgage.
• Cap rate = annual NOI ÷ purchase price.
• Cash flow = NOI − mortgage payment.
• Cash-on-cash return = annual cash flow ÷ down payment. The calculator uses the down payment only; including closing costs and repairs would lower the result.
• Gross yield = annual rent ÷ purchase price.

Assumptions in our guides

• Interest rates are illustrative and labeled as such. They're chosen to be realistic for the time of writing, not live quotes.
• Unless a guide says otherwise, examples assume a 30-year fixed mortgage, property tax of 1.1% of the price per year, and homeowners insurance of $1,500 per year.
• Program rules and limits (for example, 2026 conforming loan limits, FHA mortgage insurance, and the VA funding fee) come from official sources and are dated.
• Estimates don't include every cost of a real loan or property. Always compare official Loan Estimates from lenders before deciding.

Found an error?

Email aviemavitan@gmail.com. We'll check it, fix it, and update the page date.