Calculate Your Monthly Mortgage Payment: Use this financial tool to quickly determine your required monthly mortgage payment, or solve for the principal, term, or interest rate by entering any three variables.
Mortgage Calculator Payment
Calculated Monthly Payment:
Detailed Calculation Steps
Mortgage Calculator Payment Formula
The standard formula to calculate the monthly payment (M) is:
M = P [ i(1 + i)^n / ((1 + i)^n - 1) ]
Where: P = Principal, i = Monthly Interest Rate, n = Total number of months.
Formula Source: Investopedia, CFPB
Variables Used
- Principal Loan Amount (P): The total amount of money borrowed for the mortgage.
- Annual Interest Rate (R, %): The annual rate of interest charged on the loan, expressed as a percentage.
- Loan Term in Years (N): The scheduled length of time (in years) until the loan is fully repaid.
- Monthly Payment (M): The fixed monthly amount paid to the lender, which covers both principal and interest.
Related Calculators
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- Debt-to-Income Ratio Calculator
- Refinance Savings Calculator
- Mortgage Affordability Calculator
What is Mortgage Calculator Payment?
A mortgage payment calculator is a specialized financial tool designed to estimate the periodic payment required to pay off a mortgage loan over a specified term. It takes the loan principal, interest rate, and term length as inputs and solves for the missing variable, most commonly the fixed monthly payment (M).
Beyond simply calculating the payment, the tool is crucial for financial planning. It helps prospective homeowners understand the total cost of borrowing, how changes in rate or term affect monthly expenses, and ultimately, how much they can realistically afford. By isolating the key components—principal and interest—users can model different scenarios and optimize their loan structure before committing.
How to Calculate Monthly Payment (Example)
- Gather Variables: Suppose you borrow $200,000 (P), the annual interest rate is 5% (R), and the term is 30 years (N).
- Calculate Monthly Rate (i): Divide the annual rate by 12 and 100: i = (5 / 100) / 12 = 0.00416667.
- Calculate Total Payments (n): Multiply the term in years by 12: n = 30 years * 12 = 360 months.
- Apply Formula: Substitute the values into the monthly payment formula: M = $200,000 [ 0.00416667 * (1 + 0.00416667)³⁶⁰ / ((1 + 0.00416667)³⁶⁰ – 1) ].
- Result: After solving, the monthly payment (M) is approximately $1,073.64.
Frequently Asked Questions (FAQ)
Is the monthly payment constant throughout the loan term?
Yes, for a fixed-rate mortgage, the monthly payment (M) is constant. However, the proportion of that payment applied to interest versus principal changes over time, with more interest paid at the beginning.
What is the difference between APR and the interest rate?
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, as it includes the interest rate plus other costs like broker fees, discount points, and other charges.
Does this calculator include property taxes and insurance?
No. This calculator strictly calculates the principal and interest (P&I) portion of the payment. Homeowners must budget separately for escrow payments, which cover property taxes and home insurance.
Can I use this to calculate how long it takes to pay off the loan?
Yes. If you input the Principal (P), Rate (R), and a desired Monthly Payment (M) higher than the minimum, the calculator will solve for the Loan Term in Years (N).