Calculation Methodology &
Financial Logic
A plain-language technical breakdown of how our calculators arrive at their numbers, the formulas we implement, and where our modeling scope begins and ends.
Core Calculation Frameworks
Built on standard banking algorithms, IRS codes, and federal loan guidelines.
1. Actuarial Amortization Math
Every loan calculator models exact monthly compounding. Monthly principal and interest payments are computed via the institutional fixed payment formula $P = L_0 \frac{r(1+r)^N}{(1+r)^N - 1}$. Prepayments apply 100% directly toward outstanding principal.
2. 2026 IRS Tax & Payroll Rules
Calculations integrate official 2026 IRS standard deductions ($16,100 Single / $32,200 MFJ / $24,150 HOH), 2026 Social Security wage base limit ($184,500), 1.45% Medicare, and the 0.9% Additional Medicare Tax above $200k/$250k thresholds.
3. FHA, VA & Government Guidelines
FHA calculations model the 1.75% Upfront MIP (financed) and 0.55% Annual MIP with lifetime MIP enforcement for LTV > 90%. VA calculations enforce statutory funding fee tiers (2.15% first use @ $0 down) and 100% disability exemptions with $0 monthly PMI.
4. Student Loan RAP & PSLF Standards
Calculates statutory PSLF (120 qualifying payments, 100% tax-free under 34 CFR § 685.219) and the 2026 Repayment Assistance Plan (RAP): 1%–10% AGI bracket rate, $50/dependent credit, $10 min payment, no negative amortization, $50 principal subsidy, and 30-year forgiveness.
Scope & Precision Principles
Scheduled On-Time Payments
Assumes payments are made on schedule each month with no missed, late, or partial payments.
Compounding Conventions
Interest compounds monthly unless daily or annual compounding frequency is explicitly selected.
Floating-Point Precision
Calculations run at 64-bit IEEE 754 precision and round to the nearest cent only for display.
Educational Scope
Tools model core financial contracts. Real-world lender quotes may include escrow, fees, or specific day-count conventions.
My Wealth Harbor tools are designed for educational decision analysis. Tax regulations, interest rate environments, and lender underwriting criteria evolve. These models do not constitute licensed legal, tax, or mortgage advice. Always verify official loan terms and tax filings with a qualified CPA, licensed financial advisor, or lender.
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