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Quickly determine your estimated monthly mortgage payment, total interest paid, and total cost of the loan using our easy-to-use **Mortgage Loan Payment Calculator**.
Mortgage Loan Payment Calculator
Estimated Monthly Payment:
$0.00Mortgage Loan Payment Calculator Formula
The standard formula used to calculate the fixed monthly payment (M) is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
Where:
P = Principal Loan Amount
i = Monthly Interest Rate (Annual Rate / 12)
n = Total Number of Payments (Loan Term in Years × 12)
Formula Sources: Investopedia, Bankrate
Variables Explained
- Loan Amount (P): The total amount of money borrowed from the lender. This excludes any down payment.
- Annual Interest Rate (I): The annual percentage rate (APR) charged by the lender for the loan. This is divided by 12 to get the monthly rate (i).
- Loan Term in Years (N): The length of time over which the loan is scheduled to be repaid (e.g., 15, 20, or 30 years). This is multiplied by 12 to get the total number of payments (n).
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What is a Mortgage Loan Payment Calculator?
A Mortgage Loan Payment Calculator is an essential financial tool that estimates the required monthly payment for a home loan. By inputting the principal loan amount, the annual interest rate, and the loan term, the calculator uses the standard amortization formula to determine the fixed payment necessary to pay off the principal and interest over the life of the loan.
Understanding this monthly obligation is the critical first step in budgeting and determining how much house you can afford. The result typically includes principal and interest, but remember that actual payments often include property taxes and homeowner’s insurance (PITI), which should be factored into your total housing cost budget.
How to Calculate Mortgage Payment (Example)
Let’s use an example to illustrate the calculation steps:
- Identify Variables: Assume a Principal (P) of $200,000, an Annual Rate (I) of 6%, and a Term (T) of 30 years.
- Calculate Monthly Rate (i): Divide the annual rate by 12 and 100 to get the decimal monthly rate: $i = 0.06 / 12 = 0.005$.
- Calculate Total Payments (n): Multiply the term by 12: $n = 30 \times 12 = 360$ payments.
- Apply Formula: Plug these values into the formula $M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]$.
- Solve: $M = 200,000 \times [ 0.005(1.005)^{360} ] / [ (1.005)^{360} – 1 ]$.
- Final Result: The resulting monthly payment (M) is approximately $1,199.10.
Frequently Asked Questions (FAQ)
No, this calculator strictly calculates the principal and interest (P&I) portion of your monthly payment. You must manually add property taxes, homeowner’s insurance, and any HOA fees to estimate your total housing payment (PITI).
Increasing the loan term (e.g., from 15 to 30 years) will lower your monthly payment but significantly increase the total amount of interest you pay over the life of the loan.
The Interest Rate is the cost of borrowing the principal. The Annual Percentage Rate (APR) is a broader measure of the cost of the loan, including both the interest rate and other charges (like closing costs and points).
Yes, the underlying amortization formula is the same for most installment loans (like auto loans or personal loans), but ensure the interest rate and compounding frequency match the loan terms (this calculator assumes monthly compounding).