๐ Amortization Formula
M = P ร [r(1+r)^n] / [(1+r)^n - 1]
Where:
M = Monthly payment
P = Principal loan amount
r = Monthly interest rate
n = Number of payments
๐ฐ Extra Payments
Extra payments go directly toward principal, reducing:
โข Total interest paid
โข Loan term length
โข Future interest calculations
Even small extra payments can save thousands!
๐๏ธ Property Taxes & Insurance
Lenders often require escrow for:
โข Property taxes (1-3% of home value)
โข Homeowners insurance (0.3-0.5%)
โข PMI if down payment < 20%
These add to your monthly housing costs.
๐ Regional Differences
Mortgage terms vary by country:
โข US: 30-year fixed common
โข UK: 25-year with 5-10% down
โข Japan: 35-year with low rates
โข Germany: 20-year with strict requirements