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Mortgage Tools

Mortgage Amount:$
Interest Rate:%
Mortgage Tenure(months):
Monthly Payment($):

How to Calculate Mortgage Monthly Payments?

Look at the detailed step-by-step procedure to calculate the monthly payments easily and quickly. Go through the below steps carefully.

  • Let us know the details of a mortgage amount, interest rate, and mortgage terms.
  • After that apply the formula and keep all the details in the formula.
  • Then simplify it and you will get the monthly payments.

Now we will look into the terms that are used in the mortgage calculator.

Mortgage Amount:  The amount you need to spend on a mortgage. Original principal mortgage amount when calculating the current mortgage.

Mortgage Term:  The time left when calculating the given mortgage.

Interest Rate: Annual interest rate on the loan. This interest rate is charged differently.

Monthly Payment:  The amount that you need to pay on a monthly basis towards interest and principal.

Now, look into the formula, that you need to calculate the mortgage monthly payments.  

PMT = PV i(1+i)n/ (1+i)n - 1

Where,

PMT is the mortgage payment amount.

PV is the present value.

n is the number of mortgage payments.

i is the period interest rate.

Example:

Question: Suppose you wish to acquire a car that costs $34550. And to make the down payment of $1000 along with the interest of 2% on 3 years with a $15500 loan.

Solution:

Given, Interest = 2%, Mortgage amount = $34550, Mortgage term = 3 years.

As we know the mortgage monthly payment formula,

PMT = PV i(1+i)n/ (1+i)n - 1

= [$15500 * (0.02/12)( 1+ 0.02/12)36] / [( 1+ 0.02/12)36 - 1]

= [$15500 * (0.001)( 1+ 0.001)36] / [( 1+ 0.001)36 - 1]

Monthly payment = $ 989.60

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Frequently Asked Questions on Mortgage Tools

1. How can I calculate the mortgage monthly payment?

Mortgage monthly payment can be calculated by using formula, PMT = PV i(1+i)n/ (1+i)n - 1

2. How this mortgage calculator can be used?

Simply give the inputs in the input fields click on the calculate button and get the answers easily.

3. What is the interest rate in the mortgage calculator?

Interest rate is nothing but the rate that is being charged when we are taking mortgagor any type of loan.

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