<title>Learn how Money calculates mortgage payments</title>
<category>tax</category>
<klink type="cncpt">Tell me how Money calculates mortgage payments</klink>
</index>
<content>
<p>Money calculates the principal and interest amounts for each mortgage payment based on your total payment (not including fees such as insurance), the length of your loan, your interest rate, and your loan balance. If you have an <glossary>adjustable-rate mortgage (ARM)</glossary>, you must update the interest rate manually when it changes. <alink type="prcdr" href="changeloanaccountinformation.xml"/></p>
<p>Be sure to assign the appropriate interest <glossary>category</glossary> to your account and specify if the interest is tax deductible, so you can track your deductible interest in the Tax Line Manager.</p>