Definition: "Mortgage vs Income Calculator" refers to a simple mathematical tool or software that compares the interest rates, fees, and terms of two different mortgage products: an "annual percentage rate" (APR) based on the amount of principal borrowed, and an "annual income" (also known as "interest only") based on your annual income. The term "mortgage" refers to a type of loan where the borrower pays back the loan in installments over a period of time. The interest rate paid on this mortgage depends on various factors such as the amount borrowed, term length, and the interest rate on the principal loan. Mortgages are typically paid back by making monthly or annual payments to the lender, which includes paying off any unused balance that has accumulated over time due to early repayment. This process is called "mortgage refinance." An income calculator compares your net income with the amount of your mortgage payment to see if you can afford to make payments on the mortgage. The term "income" refers to the total monthly or annual income, while "interest only" means paying for the loan in full without making any payments. The goal of a mortgage calculator is to help you determine whether you have enough money to make monthly or annual payments on your mortgage to cover your expenses over time and pay off the principal loan.
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