What factor significantly affects the calculation of the monthly mortgage payment?

The calculation of the monthly mortgage payment is primarily influenced by the loan amount and the interest rate. The loan amount determines the principal borrowed, which directly affects the payment as more borrowed money typically results in higher monthly payments. The interest rate, on the other hand, represents the cost of borrowing that principal amount, and it heavily influences how much extra the borrower pays over time. Higher interest rates lead to larger payments because they increase the total cost of the loan.

While factors such as the borrower’s age, appraised value of the property, and income level may impact the approval process or overall qualification for a loan, they do not directly factor into the formula used to compute monthly mortgage payments. Only the loan amount and interest rate are essential for calculating the specific payment amount that will be owed each month.