How do you calculator the mortgage?

Answer 1

The formula for calculating your monthly mortgage payment is:

M = P * (i / (1 - (1+i)^-T))

M - is the monthly payment

P - is the principle

i - is the monthly interest

T - is the term

First convert your interest (i) to a decimal

3% interest / 100 = .03 Then divide .03 by 12 months = .0025

M = P * (0.0025 / (1 - (1+0.0025)^-T))

(1+0.0025) = 1.0025

M = P * (0.0025 / (1 - (1.0025)^-T))

Next add in your Term, in this case it is 30 years (30x12=360 months)

T=360

M = P * (0.0025 / (1 - (1.0025)^-360))

1.0025 to the -360 power. For this you need to turn the negative exponent to a positive exponent, which means fractions!

1

--------------- = 0.40703

1.0025(360)

M = P * (0.0025 / (1 -0.40703))

(1 -0.40703) = 0.59297

M = P * (0.0025 / 0.59297)

(0.0025 / 0.59297) = 0.00422

M = P * (0.00422)

P is the Principle, or the total amount that you are borrowing.

In this case P = $250,000

M= $250,000 * 0.00422

M = $1055

So the monthly payment would be $1,055

Answer 2

You can do it, but it isn't exactly straight forward. Here is the basic formula that you will need to follow:

M = P * (i / (1 - (1+i)^-T))

M - is the monthly payment

P - is the principle

i - is the monthly interest

T - is the term

So, we buy a house for $350,000 with a 3% interest rate, and the term of the mortgage is 30 years (360 months)

Convert the interest from percentage to decimal, and then to monthly.

3% divided by 100 = 0.03 and then 0.03 divided by 12 months = 0.0025

So i = 0.0025

Add in your Term, in this case it is 30 years (30x12=360 months)

T=360

Break the calculations into sections, doing the innermost parenthesis first

M = P * (0.0025 / (1 - (1+0.0025)^-360))

(1+0.0025) = 1.0025

M = P * (0.0025 / (1 - (1.0025)^-360))

This next part is the most complex. You have to deal with a negative exponent. 1.0025 to the -360 power. To do this you have to convert the negative to a positive.

On your scientific calculator, you will need to use the button that has an X with a small y above it. This is the "power" or exponent button.

Enter 1.0025 xy 360 = 2.45684

Then divide 1 by 2.45684 = 0.40703

The rest is relatively simple

M = P * (0.0025 / (1 - 0.40703))

1 - 0.40703 = 0.59297

M = P * (0.0025 / 0.59297)

0.0025 Divided by 0.59297 = 0.00422

P is our principle, which is $350,000. Multiplying 350,000 by 0.0042 will give us a monthly mortgage payment of $844

M = $1477 per month

Answer 3

When you're in the market for a new home, figuring out how much you can afford is essential. Instead of taking the time to go to the bank and find out how much a mortgage payment would be, you can instead use a mortgage payment calculator. These calculators are available online and can be used relatively quickly to determine how much you can afford.

Using the Calculator

Once you've located a mortgage payment calculator, you have to provide as much information as you know in order to get an accurate estimate. For example, most mortgage payment calculators will ask you for information such as the total mortgage amount and the interest rate. You will also be asked to enter in the term of the mortgage and possibly some other information.

When using a mortgage payment calculator, you may not be sure what interest rate to enter. You cannot know for sure what kind of interest rate you can get until you get a quote from a mortgage lender. However, you can estimate what the mortgage rate will be by looking at market interest rates at the time of your calculation. Once you enter all of the information that the calculator asks for, you click the "Calculate" button or something similar, depending on the calculator you are using.

Interpreting the Results

Once you have provided the appropriate information and calculated the payment, it is important to interpret what it actually represents. Most mortgage payment calculators provide you with only the principal and interest payment once you make a calculation.

In reality, you usually can't get by just by paying a principal and interest payment. You'll still have to pay taxes and insurance on the property. Most mortgage lenders require you to make these payments each month as part of your mortgage payment into an escrow account. Then at the end of the year, the escrow agent pays your homeowners insurance and your property taxes on your behalf.

Because of this discrepancy, it is important to factor in the extra costs for property taxes and insurance. Once you've made the proper calculations, you can get a realistic idea of what it will cost to buy a new home.