The mortgage calculator determines the monthly mortgage payments based on the home price, down payment, term, and interest rate. It also allows you to include the property tax, home insurance, PMI, and HOA fees in the calculation.
The mortgage calculator is a financial tool that estimates the monthly payments for your home loan. The tool also lets you include the taxes, insurance, PMI, and HOA fees in the mortgage calculation.
The monthly mortgage payment is calculated using the following formula:
M = P × |
|
Where,
M = Monthly mortgage payment,
P = Principal loan amount,
i = Rate of interest per month,
n = Number of monthly payments over the life of the loan.
Let's take an example.
Suppose, a person wants to take a home loan of $223,000 with an annual interest rate of 7.5% for 15 years. Calculate the monthly mortgage payment for the given data.
Here,
P = $223,000,
i = 7.5%,
n = 15.
1. Convert the annual interest rate into the monthly interest rate.
Annual interest rate (i) = 7.5% = 7.5/12 = 0.625.
2. Convert the loan term years into months.
Loan term (n) = 15 years = 15 × 12 = 180 months.
3. Put all the values in the formula.
M = P × |
|
M = $223,000 × |
|
M = $2,067.24