#Calculate a mortgage payment how to#
#Calculate a mortgage payment full#

Using the same numbers as above, that’s $16,000. Perhaps you’re paying a 20% down payment in the very first month of your payment period. If you’re paying an up-front down payment, this will affect the P in your equation - or the total amount of your loan. You can incorporate additional variable into this calculation by tweaking the equation slightly. You may also need to incorporate other variables like a down payment, homeowner’s insurance, or property tax, which are all costs that will factor into your total monthly payment. The equation we used is a simple method that only uses your loan amount, interest rate, and timeline. Keep in mind that we rounded all numbers five spaces past the decimal point, so this amount isn’t exact to the amount of change. Now you know that you’ll be spending about $848 per month for 10 years to pay off your mortgage fully. This simplifies the equation down to just 80,000 X. Next, solve all the math within the brackets. Unless you can calculate exponents in your head, you’ll need the help of a calculator for this portion. Using these numbers, your equation will be: The bank has given you ten years to pay off your loan, or 120 months (n).

Remember that 5% is your annual interest rate, so you need to divide it by 12.

N = The total amount of months in your timeline for paying off your mortgageįor an easy example, let’s say that the total amount of your loan is $80,000 (P), while your total interest rate is 5%, or.

I = Your interest rate, as a monthly percentage.

Here’s a breakdown of each of the variables: These factors include the total amount you’re borrowing from a bank, the interest rate for the loan, and the amount of time you have to pay back your mortgage in full.įor your mortgage calc, you’ll use the following equation:

#Calculate a mortgage payment how to#

How to Calculate Your Monthly Mortgage Payment by HandĬalculating your mortgage by hand is beneficial because you’ll learn how different factors work together to affect your monthly rate. In this article, we’ll walk you through how to calculate monthly loan payments for your mortgage so you can feel confident in your long-term budget. Start by doing some math to calculate loan payments - you can do this by hand or by using online calculators. To make the process a little easier, it helps to calculate your budget for monthly payments ahead of time. As you’re looking, you must be realistic with what you can afford month to month and in the long term. A mortgage allows you to own a home, so long as you’re able to pay back the mortgage after a period of time. In this day and age, it’s important to find a home you both love and can afford.

#Calculate a mortgage payment full#

Among the full process of packing up, finding a mover, and searching for a home, there’s also some math you’ll need to do upfront to understand your mortgage calculation. Looking for a new home to buy can be exciting and stressful at the same time.