Q:
What Is the Formula for Calculating a Mortgage Payment?
A:
Quick Answer
The formula for calculating a monthly mortgage payment on a fixed-rate loan is: P = L[c(1 + c)^n]/[(1 + c)^n - 1]. The formula can be used to help potential home owners determine how much of a monthly payment towards a home they can afford.
Continue ReadingFull Answer
Before using the formula, it is important to understand what each variable means:
P= payment
L= loan amount
C= interest. To calculate the monthly interest, take the annual rate and divide it by 12. For example, if the annual rate is 3.5 percent, 0.035/12 = .003.
N= number of mortgage payments. If considering a 30-year mortgage, 12 payments a year times 30 years equals 360 total payments.
Learn more about Financial CalculationsSources:
Related Questions
-
Q:
What Is a P&I Payment on a Mortgage?
A: A "P&I" payment for a mortgage is a "principal and interest" payment, which is usually made monthly over the term of the loan, according to Quicken Loans. ... Full Answer >Filed Under: -
Q:
What Are the Mathematics Behind a Mortgage Loan Calculator?
A: Mortgage calculators use loan amount, interest rate and number of monthly payments to compute the amount of a monthly mortgage payment, according to Intera... Full Answer >Filed Under: -
Q:
What Are Mortgage Equations, and How Are They Calculated?
A: A mortgage equation is the mathematical formula that a lender uses in order to determine the borrower's fixed monthly payment to pay off a mortgage loan ov... Full Answer >Filed Under: -
Q:
Is a Mortgage Payment Calculator the Same As Amortization?
A: A mortgage calculator is also known as an amortization schedule calculator that assists borrowers to estimate monthly home loan payments, according to Well... Full Answer >Filed Under:
You May Also Like
-
Q:
Where Can You Find the Formula One Schedule?
-
Q:
What Is the Structural Formula of Hexene?
-
Q:
What Is the Formula for Mercury(II) Nitrate?
-
Q:
What Kind of Bonds Make up a Formula Unit of Sodium Chloride?
-
Q:
How Much Did Things Cost in 1969?
-
Q:
What Is the Formula for the Surface Area of a Pyramid?
