Plain-English reference
Financial calculator glossary
Understand the terms behind loans, taxes, investing, insurance, retirement, business, and property calculations—then open the tools that use them.
A
- Amortization
- The gradual repayment of a balance through scheduled payments. Each payment is divided between interest and principal, and that split usually changes over time.
- Amortization Calculator →Mortgage Calculator →
- Annual percentage rate (APR)
- A standardized annual borrowing-cost measure that generally combines interest with certain finance charges. APR can be more useful than the note rate when comparing similar loan offers.
- APR Calculator →Personal Loan Calculator →
- Annual percentage yield (APY)
- The effective annual return after accounting for compounding. APY can exceed the stated annual rate when interest compounds more than once per year.
- Compound Interest Calculator →Investment Calculator →
B
- Basis
- The amount used to measure gain, loss, depreciation, or another tax result. Purchase cost is often the starting point, but fees, improvements, distributions, and adjustments may change basis.
- Cost Basis Calculator →Capital Gains Tax Calculator →
- Break-even point
- The level of time, sales, or savings at which accumulated benefits equal accumulated costs. Passing break-even does not guarantee that an option is affordable or low risk.
- Break-Even Calculator →Mortgage Refinance Savings Calculator →
C
- Capital gain
- The positive difference between proceeds and adjusted basis when a capital asset is sold. Holding period, exclusions, recapture, and income can affect tax treatment.
- Capital Gains Tax Calculator →Cost Basis Calculator →
- Capitalization rate
- A property's annual net operating income divided by its value or purchase price. Cap rate excludes financing and does not by itself measure total investment return.
- Cap Rate Calculator →Rental Property ROI Calculator →
- Cash-on-cash return
- Annual pre-tax cash flow divided by the cash invested. It incorporates financing cash flows but may exclude appreciation, taxes, and future sale proceeds.
- Rental Property ROI Calculator →ROI Calculator →
- Closing costs
- Transaction expenses paid in addition to or deducted from the main purchase, sale, or loan amount. They may include lender, title, settlement, government, prepaid, and escrow items.
- Closing Costs Calculator →Home Sale Net Proceeds Calculator →
- Combined loan-to-value (CLTV)
- All debts secured by a property divided by the property's value. Lenders may apply product-specific CLTV limits and valuation rules.
- Home Equity Borrowing Calculator →HELOC Calculator →
- Compound interest
- Growth calculated on both the starting principal and previously accumulated growth. Contribution timing, compounding frequency, fees, and withdrawals affect the outcome.
- Compound Interest Calculator →Investment Calculator →
- Contribution margin
- Revenue remaining after variable costs. It contributes toward fixed costs and profit, but it is not the same as net profit.
- Break-Even Calculator →Product Pricing & Margin Calculator →
D
- Debt-service coverage ratio (DSCR)
- Cash flow available for debt service divided by scheduled debt payments. Lenders define qualifying cash flow and minimum coverage differently.
- Business Loan Calculator →Rental Property ROI Calculator →
- Debt-to-income ratio (DTI)
- Monthly debt obligations divided by gross monthly income. Front-end DTI focuses on housing while back-end DTI includes broader recurring debt.
- Debt-to-Income Ratio Calculator →Mortgage Affordability Calculator →
- Deductible
- The amount a policyholder generally pays before applicable insurance coverage begins paying. Policy language can apply different deductibles to different losses.
- Home Insurance Calculator →Car Insurance Estimator →
- Discount point
- An upfront mortgage charge commonly equal to one percent of the loan amount. Paying points may reduce the rate, but the value depends on pricing and holding period.
- Mortgage Points Calculator →Mortgage Calculator →
E
- Effective tax rate
- Total tax divided by the relevant income base. It differs from a marginal rate, which applies only to the next portion of taxable income.
- Income Tax Calculator →Self-Employed Tax Calculator →
- Equity
- The value of an asset minus debt secured by or associated with it. Market changes, selling costs, and payoff charges can affect realizable equity.
- Home Equity Borrowing Calculator →Home Sale Net Proceeds Calculator →
- Escrow
- Money held by a third party for a transaction or future bills. Mortgage escrow accounts commonly collect amounts for property tax and homeowners insurance.
- Closing Costs Calculator →Mortgage Calculator →
- Expense ratio
- An annual investment-fund operating cost expressed as a percentage of assets. Even a small percentage can compound into a material long-term difference.
- Investment Calculator →Retirement Calculator →
L
- Loan-to-value ratio (LTV)
- Loan balance divided by collateral value. LTV can influence pricing, mortgage insurance, equity access, and underwriting.
- Mortgage Calculator →Auto Loan Calculator →
M
- Marginal tax rate
- The rate that applies to the next portion of taxable income within a progressive system. It is not usually the rate applied to all income.
- Income Tax Calculator →Bonus & Severance Tax Calculator →
N
- Net operating income (NOI)
- Property operating income minus operating expenses before financing, income tax, depreciation, and capital expenditures under common real-estate conventions.
- Cap Rate Calculator →Rental Property ROI Calculator →
- Net present value
- The present value of future cash flows after discounting them at a selected rate, minus the initial cost. The chosen discount rate can materially change the result.
- ROI Calculator →Investment Calculator →
O
- Origination fee
- A charge for arranging or processing a loan. It may be paid in cash, withheld from proceeds, or financed, with different effects on cash received and borrowing cost.
- Personal Loan Calculator →Business Loan Calculator →
P
- Private mortgage insurance (PMI)
- Insurance that may protect a conventional mortgage lender when borrower equity is limited. Cancellation rules and pricing depend on the loan and applicable requirements.
- Mortgage Calculator →Down Payment Calculator →
R
- Real return
- Investment growth after adjusting for inflation. A positive nominal return can still produce limited or negative purchasing-power growth.
- Investment Calculator →Retirement Calculator →
- Refinancing
- Replacing an existing debt with a new loan. A complete comparison considers fees, term changes, balance trajectory, break-even time, and lost borrower protections.
- Refinance Calculator →Mortgage Refinance Savings Calculator →
S
- Simple interest
- Interest calculated on principal without adding prior interest to the calculation base. Actual loan payment conventions may still involve daily accrual and changing principal.
- Simple Interest Calculator →Auto Loan Calculator →
W
- Withholding
- Tax taken from a payment and remitted in advance. Withholding is a prepayment toward tax liability, not necessarily the final amount owed.
- Paycheck Calculator →Bonus & Severance Tax Calculator →