1. What is Mortgage Cost Per Thousand?

The Mortgage Cost Per Thousand calculation determines the monthly payment required for each $1,000 borrowed based on the interest rate and loan term. This helps borrowers quickly estimate their mortgage payments without complex calculations.

2. How Does the Calculator Work?

The calculator uses the mortgage cost per thousand formula:

Where:

• \( Rate \) — Annual interest rate (expressed as a decimal)
• \( Months \) — Loan term in months

Explanation: The formula calculates the monthly payment for each $1,000 borrowed, considering the interest rate compounded monthly over the loan term.

3. Importance of Mortgage Cost Calculation

Details: Understanding the cost per thousand helps borrowers compare different loan options, budget effectively, and make informed decisions about mortgage affordability.

4. Using the Calculator

Tips: Enter the annual interest rate as a decimal (e.g., 0.05 for 5%), and the loan term in months (e.g., 360 for 30 years). All values must be valid (rate > 0, months > 0).

5. Frequently Asked Questions (FAQ)

Q1: Why calculate cost per thousand instead of total payment?
A: Cost per thousand allows for quick estimation and comparison across different loan amounts without recalculating the entire mortgage payment.

Q2: How do I convert annual interest rate to decimal?
A: Divide the percentage by 100 (e.g., 4.5% becomes 0.045).

Q3: How do I convert years to months?
A: Multiply the number of years by 12 (e.g., 30 years becomes 360 months).

Q4: Does this include property taxes and insurance?
A: No, this calculation only includes principal and interest. Property taxes, insurance, and PMI would be additional costs.

Q5: Is this calculation accurate for all mortgage types?
A: This formula works best for fixed-rate mortgages. Adjustable-rate mortgages may have different payment structures.