May 29, 2020

Loan Mortgage Calculator – How to Calculate Mortgage Payments

Using a Loan Mortgage Calculator to estimate that of your monthly mortgage payment, you can input various home price, down payment, loan term and interest rate in order to see how your monthly payment varies.

Loan Mortgage Calculator

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Loan Mortgage Calculator

Our monthly payment estimates are been broken down by the principal and the interest, taxes and homeowners insurance. We are taking our calculator a step further by factoring in your credit score range, the Zipcode, and the HOA fees to offer you a more precise payment estimate. You will have to go into the home buying process with a more right picture of how to calculate mortgage payments and purchase it with full confidence.

How to Calculate Mortgage Payments

If you need to know how much your monthly payment is? To calculate it mathematically, here is a formula to help you out:

The equation for the Mortgage Payments

M= P[r (1+r) ^ ((1+r) ^n)-1)]

  • M= the total monthly mortgage payment.
  • P= the principal loan amount
  • R= your monthly interest rate. Lenders give you an annual rate so you will need to divide the figure by 12(the total months in a year) to get the monthly rate. If the interest rate is 5% then your monthly rate will be 0.004167 (0.05/12 = 0.004167).
  • n= number of payments over the loan’s lifetime. Multiply the number of years in your loan term by 12 to get the number of the payments for the loan. E.g. a30 years fixed mortgage would have to be 360 payment (30х12=360).

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With this mathematical formula, you can be able to know how much home can afford.

What is Included in my Monthly Payment?

Somehow, your monthly mortgage payment is been made up of your principal and the interest. That’s what the calculator does show. The principal parts do go toward paying off the total amount you have borrowed. The interest is a percentage of the amount borrowed that you can pay back to your lender.

Although, for a lot of homeowners, the monthly mortgage payment includes more than just principal and interest. It can also include property taxes and the home homeowner’s insurance premiums if you do own an escrow account with the loan. An escrow account does allow you to pay for your taxes and insurance premiums as part of your monthly mortgage payment.

What Factors Determine my Interest Rate?

The following lists are a factor that determines your interest rate.

  • Types of loan
  • Credit history
  • Down payment amount
  • Loan amount

Your interest rate is been based on the level of risk that the lenders predict for your loan, that’s the reason why a lot of factors contribute to your individual rate. The changing daily based on the market trends of the mortgage rates. Here is a standard mortgage calculator.

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