Certified Financial Analyst and Mortgage Expert.
Use the most accurate mortgage payment calculator google module to estimate your monthly principal and interest payment, understand the amortization schedule, and plan your home ownership journey effectively.
Mortgage Payment Calculator
Calculation Details
Enter your values above and click ‘Calculate’ to see the step-by-step breakdown.
Mortgage Payment Calculator Formula
M = P [ i(1 + i)ⁿ / ((1 + i)ⁿ - 1) ]
Where:
i = Annual Interest Rate / 1200n = Loan Term in Years * 12
Variables Explained
- Loan Principal Amount (P): The total amount of money borrowed for the mortgage.
- Annual Interest Rate (R): The yearly interest rate applied to the loan, expressed as a percentage.
- Loan Term (T): The number of years over which the mortgage will be repaid (e.g., 15 or 30 years).
- Monthly Payment (M): The fixed amount paid every month to cover both the principal and the interest (P&I).
Related Calculators
Explore other financial tools for your home and personal finance needs:
- Home Equity Line of Credit (HELOC) Calculator
- Refinance Savings Calculator
- Debt-to-Income Ratio Calculator
- Home Affordability Calculator
What is a Mortgage Payment Calculator?
A mortgage payment calculator is a critical financial tool used to estimate the monthly cost of owning a home. It typically calculates the principal and interest (P&I) portion of the payment based on the loan amount, interest rate, and term.
Understanding this amount is essential for budgeting, as the total monthly housing cost may also include property taxes, homeowner’s insurance (HOI), and private mortgage insurance (PMI). This tool provides the foundation for determining the affordability of a property.
How to Calculate Mortgage Payments (Example)
Let’s use an example to calculate the monthly payment for a $250,000 loan at a 6% annual interest rate over a 30-year term.
- Determine the Monthly Interest Rate (i): Divide the annual rate by 1200 (100 to convert percent, 12 for months). $i = 6 / 1200 = 0.005$.
- Determine the Total Number of Payments (n): Multiply the term in years by 12. $n = 30 \text{ years} \times 12 = 360$ payments.
- Calculate the Compounding Factor (1 + i)ⁿ: $(1 + 0.005)^{360} \approx 6.022575$.
- Apply the Formula: $M = \$250,000 \times [ (0.005 \times 6.022575) / (6.022575 – 1) ]$.
- Simplify the Expression: $M \approx \$250,000 \times [ 0.030112875 / 5.022575 ]$.
- Final Monthly Payment (P&I): $M \approx \$250,000 \times 0.0059955 = \$1,498.88$.
Frequently Asked Questions (FAQ)
What is the difference between P&I and the total payment?
The P&I (Principal and Interest) payment is calculated by this tool. The total payment includes P&I plus escrow items like property taxes, homeowner’s insurance, and often PMI (Private Mortgage Insurance).
Does this calculator include property taxes and insurance?
No, this calculator strictly computes the Principal and Interest portion of your loan. You must add estimated monthly taxes and insurance to get your true total housing expense.
How does a shorter loan term affect my payment?
A shorter term (e.g., 15 years vs. 30 years) generally results in a higher monthly payment because you are paying off the principal over fewer months, but the total interest paid over the life of the loan is significantly lower.
Can I use this to calculate an adjustable-rate mortgage (ARM)?
This calculator is best suited for fixed-rate mortgages. While you can use it to find the initial payment for an ARM, it cannot predict future rate changes or subsequent monthly payments after the adjustment period.