Mortgage Payment Calculator
Mortgage Payment Calculator
A fast, simple mortgage payment calculator that estimates your monthly home payment in seconds. It works as a free mortgage calculator with taxes and PMI, so the figure you see reflects what you would actually pay each month.
Can you afford the mortgage?
Use this mortgage loan calculator, also known as a home loan calculator, before you commit to a
mortgage. The reason is simple: it tells you whether you can afford the loan. If you can, it
calculates your payment with taxes and PMI so you know exactly what to expect each
month.
That makes it much easier to set a realistic budget that fits your lifestyle and expected
earnings.
How to use our mortgage payment calculator
Enter the monthly payment you want to make or think you can afford. Fill out the other
fields (taxes, start date, PMI, etc.) only if they are different from the defaults in the mortgage
payment calculator, then hit enter.
The free mortgage calculator returns your monthly principal & interest, the total number of
payments, the total interest you will pay, and your payoff date. It also builds a complete
amortization schedule through the final year of the loan, which you can view
monthly or yearly.
Whatever your needs and whatever type of mortgage loan you are considering, these precise, thorough
calculations can save you a lot of frustration and uncertainty.
The online mortgage calculator is free to use.
Figuring Out What You Can Afford
Buying a home is a huge investment, and the decisions you make now will stay with you for a long time, 30 years to be exact. Before you enter into any mortgage agreement, you should know what type of home you can afford and understand how the loan terms affect repayment. At the very least, have a clear idea of the payment you can realistically afford each month. Be sure to include insurance and land taxes in that payment as well.
Start with a budget
A mortgage calculator shows you how much home you can realistically afford. Before you start punching numbers into a calculator, however, you need a budget. To create a realistic one, keep a notebook with you and jot down everything you spend: bills, restaurant tabs, transportation, entertainment, and so on. Track everything for an entire month. You may be wondering why you can’t simply write down your bills and formulate a budget that way. You can, but you will probably leave out the daily expenses that affect your ability to make your mortgage payment.
Remember: allow for expenses that will be tacked onto your mortgage
payment. After you add land taxes and insurance, your payment
could end up hundreds of dollars more than what you first
figured with the calculator.
After you formulate a budget, use a mortgage calculator to see what you can afford. If you think you can afford a $700 monthly payment, enter this amount into the payment field and the calculator will automatically fill in the other fields, showing how much you can borrow.
Always use a mortgage calculator when shopping for a home. It helps you compare the cost of buying different homes, which makes the selection process far easier. A calculator also gives you the loan information you need and may prompt you to seek more favorable terms.
Whenever you shop for a new home, shop for a new home loan as well. Gather as many loan offers as you can and compare each using a loan calculator. Doing your homework can save you a lot of money and heartache in the long run. Think about this: a difference of only 1.5% interest on a 30 year, $100,000 loan will cost you $39,980 in interest over the course of the loan. It’s your money. Use a mortgage calculator to learn how you can hold onto more of it.
How do we calculate?
If you would like to know how to calculate your mortgage payment on your own, the equation is:
MP=P[r(1+r)^n/((1+r)^n)-1]
- MP = monthly payment;
- P = principal;
- r = monthly interest rate**
- n = number of months you will have to repay your loan for.
**To calculate your monthly interest rate simply divide the annual interest rate by 12.
Example calculation
Let's do an example calculation. For that, we need three things: the principal amount, the monthly interest rate, and the loan period (number of payments). You can find this information in your mortgage loan agreement. For our purposes, we will assume the following numbers:
- our principal (P) equals 100 000 EUR;
- our loan period is 20 years - that is 240 months, therefore "n" = 240;
- the annual interest rate amounts to 5%; this divided
- by 12 equals 0,004 (0,05/12), and this is our "r".
Now, we can get on with the calculation:
MP=100 000[0,004(1+0,004) ^ 240/(1+0,004)^240-1]
To make it easier, we will add 1 to the "r"
MP=100 000(0,004*1,004 ^ 240/(1,004^240)-1)
In the next step, we raise "(1+r)" (in our example 1,004) to the power of "n" (in our example 240). It is easiest to use a calculator (enter the value to be raised, then press the xy button and enter the "n" value, then press "=") or an Excel sheet (use the POWER function: =power(number to be raised,power). The number in our case is 2,607. Now our equation looks like this:
MP=100 000(0,004*2,607 / 2,607-1)
Let's simplify again: multiply "r" by the raised value on top, and subtract "1" from the raised value on the bottom:
MP=100 000(0,01043)/1,607
All that is left to do now is to divide the numerator by the denominator...
MP=100 000*0,006490
...and there you go: your monthly payment is 649,03. To find the total sum of all your payments, just multiply your monthly payment (MP) by the number of months you will pay your loan (n). In our example, that is:
649,03*240=155767,2
Once you know your total payments, you can also calculate how much you will pay the bank for lending you the money. Just subtract your principal from your total payments. In our case, the cost of the loan amounts to 55 767,2 EUR.
Or skip the long math entirely and use our mortgage calculator.
