Payment and balance mathematics
Fixed payments use a monthly rate equal to the entered annual percentage divided by 1,200. The number of installments is the entered years times twelve. With zero interest, payment is principal divided by months. Interest is calculated on the prior balance; the remainder of payment reduces principal. Internal values retain precision and are rounded for display.
Timing
Regular payments are modeled at monthly period ends. Extra principal is applied after the regular payment. The biweekly tool uses a monthly-equivalent extra-payment model, not exact 14-day servicing. HELOC and interest-only charts begin at the repayment phase. Balloon balances are measured after the selected month’s normal installment.
Comparisons
Refinance and points horizon savings compare accumulated interest plus nonrecoverable fees. Remaining balances are shown separately. Financed fees are counted once as a cost and generate interest through the increased loan balance. Simple break-even divides costs by positive payment reduction and is not a complete investment-return measure.
Housing and wealth
Property costs are entered independently. The affordability tool uses editable debt-ratio limits and fixed dollar property costs. Rent versus buy invests upfront cash for the renter and the monthly cost difference for whichever option is cheaper, with end-of-month cash flows and effective monthly growth derived from annual assumptions. Buying includes selling costs and the remaining loan payoff.
Boundaries
The models omit tax deductions, taxes on gains, individual underwriting, future rate resets, missed payments and contract-specific fees unless an input expressly includes them. PMI uses an original-value conventional illustration and does not determine cancellation rights. State pages do not embed assumed local tax rates.
Verification
Schedules are checked for principal conservation, payment identities and final balances. Comparisons also cover zero-rate cases and the treatment of financed fees. These mathematical checks do not determine lender eligibility or future investment performance. The linked guides explain the financial context.