Mortgage Prism
Decompose your mortgage like light through a prism. Compare rates across countries, analyze payment structures, and see your full amortization — free and easy.
How to Use Mortgage Prism
Mortgage Prism helps you analyze mortgage payments across multiple countries. Compare fixed vs adjustable rates, equal payment vs equal principal, and see how each payment breaks down.
Understanding Your Results
- Monthly Payment: The amount you'll pay each month (principal + interest)
- Total Payment: The total amount you'll pay over the life of the loan
- Total Interest: The total interest cost over the loan term
- Amortization Schedule: A detailed breakdown of each payment
Mortgage Payment Formula
Mortgage Prism uses the standard amortization formula for fixed-rate mortgages:
M = P × [r(1+r)^n] / [(1+r)^n - 1]Where M = monthly payment, P = principal, r = monthly interest rate, and n = number of payments.
Tips for Home Buyers
- Compare different loan terms (15-year vs 30-year) to see interest savings
- Consider your down payment — 20% down avoids PMI
- Factor in property taxes, insurance, and HOA fees
- Get pre-approved to know your actual borrowing capacity
Frequently Asked Questions
What is Mortgage Prism?
Mortgage Prism is a multi-country mortgage analysis tool that helps you estimate monthly payments, compare loan structures across countries (China, US, UK, Canada, Australia), and see the full breakdown of principal vs interest over time.
How accurate is Mortgage Prism?
Mortgage Prism provides accurate estimates for fixed-rate mortgages using standard amortization formulas. Actual payments may vary based on property taxes, insurance, PMI, and other fees not included in the calculation.
Should I choose a 15-year or 30-year mortgage?
A 15-year mortgage has higher monthly payments but saves significantly on interest. A 30-year mortgage has lower monthly payments but costs more in total interest. Use Mortgage Prism to compare both options.
What other costs should I consider?
In addition to principal and interest, consider property taxes, homeowners insurance, PMI (if down payment < 20%), HOA fees, and maintenance costs. These can add hundreds to your monthly housing expense.
What is the difference between fixed-rate and adjustable-rate mortgages (ARM)?
Fixed-rate mortgages keep the same interest rate for the entire loan term, making payments predictable. ARMs start with a lower rate during a fixed period, then adjust periodically based on market indices (like SOFR or LPR). ARMs have rate caps to limit increases. Use Mortgage Prism to compare both.
How do bi-weekly mortgage payments save money?
Bi-weekly payments split your monthly payment in half and pay every two weeks, resulting in 26 half-payments (equivalent to 13 full payments) per year instead of 12. That extra annual payment goes directly to principal, reducing your loan balance faster and saving thousands in interest. Mortgage Prism lets you compare monthly vs bi-weekly side by side.
What is LPR in China and how does it affect my mortgage?
LPR (Loan Prime Rate) is China's benchmark lending rate published monthly by the PBOC. For mortgages, the 5-year LPR is the reference rate. Commercial banks add a spread (BP) on top, and the rate resets annually on a contract-defined date. First-home buyers typically get LPR - 20BP, while second homes get LPR + 60BP. Mortgage Prism includes real-time LPR simulation with BP adjustment.
Mortgage Terms Explained
Understanding key mortgage terms can help you make better home-buying decisions. Here are the most important concepts explained in plain language.
- ARM (Adjustable-Rate Mortgage)
- A mortgage where the interest rate changes periodically based on a benchmark index (such as SOFR in the US or LPR in China). Usually starts with a lower fixed rate for 3-10 years, then adjusts every 6-12 months subject to periodic and lifetime caps.
- Amortization
- The process of paying off a loan through regular payments over time. Each payment covers both interest and principal. In early years, most of the payment goes to interest; in later years, more goes to principal.
- LTV (Loan-to-Value Ratio)
- The ratio of your loan amount to the property value. If you buy a $500,000 home with a $100,000 down payment, your LTV is 80% ($400,000 / $500,000). Lower LTV usually means better interest rates.
- DTI (Debt-to-Income Ratio)
- The percentage of your monthly income that goes toward debt payments. Lenders typically prefer a DTI below 36-43%. A lower DTI increases your borrowing capacity and improves loan terms.
- PMI (Private Mortgage Insurance)
- Insurance required by lenders when your down payment is less than 20% of the home price. It protects the lender (not you) if you default. PMI typically costs 0.5-1.5% of the loan amount annually, added to your monthly payment.
- Offset Account
- A transaction account linked to your mortgage (common in Australia and UK). The balance in this account offsets your loan principal for interest calculation. If you have $50,000 in offset against a $500,000 mortgage, interest is calculated on $450,000 only.
How to Use Mortgage Prism
Mortgage Prism helps you analyze mortgage payments across multiple countries. Compare fixed vs adjustable rates, equal payment vs equal principal, and see how each payment breaks down.
Understanding Your Results
- Monthly Payment: The amount you'll pay each month (principal + interest)
- Total Payment: The total amount you'll pay over the life of the loan
- Total Interest: The total interest cost over the loan term
- Amortization Schedule: A detailed breakdown of each payment
Mortgage Payment Formula
Mortgage Prism uses the standard amortization formula for fixed-rate mortgages:
M = P × [r(1+r)^n] / [(1+r)^n - 1]Where M = monthly payment, P = principal, r = monthly interest rate, and n = number of payments.
Tips for Home Buyers
- Compare different loan terms (15-year vs 30-year) to see interest savings
- Consider your down payment — 20% down avoids PMI
- Factor in property taxes, insurance, and HOA fees
- Get pre-approved to know your actual borrowing capacity
Frequently Asked Questions
What is Mortgage Prism?
Mortgage Prism is a multi-country mortgage analysis tool that helps you estimate monthly payments, compare loan structures across countries (China, US, UK, Canada, Australia), and see the full breakdown of principal vs interest over time.
How accurate is Mortgage Prism?
Mortgage Prism provides accurate estimates for fixed-rate mortgages using standard amortization formulas. Actual payments may vary based on property taxes, insurance, PMI, and other fees not included in the calculation.
Should I choose a 15-year or 30-year mortgage?
A 15-year mortgage has higher monthly payments but saves significantly on interest. A 30-year mortgage has lower monthly payments but costs more in total interest. Use Mortgage Prism to compare both options.
What other costs should I consider?
In addition to principal and interest, consider property taxes, homeowners insurance, PMI (if down payment < 20%), HOA fees, and maintenance costs. These can add hundreds to your monthly housing expense.
What is the difference between fixed-rate and adjustable-rate mortgages (ARM)?
Fixed-rate mortgages keep the same interest rate for the entire loan term, making payments predictable. ARMs start with a lower rate during a fixed period, then adjust periodically based on market indices (like SOFR or LPR). ARMs have rate caps to limit increases. Use Mortgage Prism to compare both.
How do bi-weekly mortgage payments save money?
Bi-weekly payments split your monthly payment in half and pay every two weeks, resulting in 26 half-payments (equivalent to 13 full payments) per year instead of 12. That extra annual payment goes directly to principal, reducing your loan balance faster and saving thousands in interest. Mortgage Prism lets you compare monthly vs bi-weekly side by side.
What is LPR in China and how does it affect my mortgage?
LPR (Loan Prime Rate) is China's benchmark lending rate published monthly by the PBOC. For mortgages, the 5-year LPR is the reference rate. Commercial banks add a spread (BP) on top, and the rate resets annually on a contract-defined date. First-home buyers typically get LPR - 20BP, while second homes get LPR + 60BP. Mortgage Prism includes real-time LPR simulation with BP adjustment.
Mortgage Terms Explained
Understanding key mortgage terms can help you make better home-buying decisions. Here are the most important concepts explained in plain language.
- ARM (Adjustable-Rate Mortgage)
- A mortgage where the interest rate changes periodically based on a benchmark index (such as SOFR in the US or LPR in China). Usually starts with a lower fixed rate for 3-10 years, then adjusts every 6-12 months subject to periodic and lifetime caps.
- Amortization
- The process of paying off a loan through regular payments over time. Each payment covers both interest and principal. In early years, most of the payment goes to interest; in later years, more goes to principal.
- LTV (Loan-to-Value Ratio)
- The ratio of your loan amount to the property value. If you buy a $500,000 home with a $100,000 down payment, your LTV is 80% ($400,000 / $500,000). Lower LTV usually means better interest rates.
- DTI (Debt-to-Income Ratio)
- The percentage of your monthly income that goes toward debt payments. Lenders typically prefer a DTI below 36-43%. A lower DTI increases your borrowing capacity and improves loan terms.
- PMI (Private Mortgage Insurance)
- Insurance required by lenders when your down payment is less than 20% of the home price. It protects the lender (not you) if you default. PMI typically costs 0.5-1.5% of the loan amount annually, added to your monthly payment.
- Offset Account
- A transaction account linked to your mortgage (common in Australia and UK). The balance in this account offsets your loan principal for interest calculation. If you have $50,000 in offset against a $500,000 mortgage, interest is calculated on $450,000 only.