how to determine mortgage payments formula

Our calculators can help you estimate your mortgage payments, debt-to-income ratio, loan-to-value ratio, potential savings by refinancing, and more. Adjustable-Rate Mortgage Payment Calculation · Determine how many months or payments are left. · Create a new amortization schedule. Use this calculator to generate an estimated amortization schedule for your current mortgage. Quickly see how much interest you could pay and your estimated.

How to determine mortgage payments formula -

How To Calculate Your Mortgage, And How It Can Help You Save Money Long-Term

Whichever mortgage calculator you use, its objective should always be to help you feel more informed on how to get a mortgage and your budget for buying a home, or to decide whether to move forward with a refinance. It all depends on your lifestyle and personal goals.

Below are some of the questions a mortgage calculator can answer.

The Length Of A Home Loan Term

The loan term refers to how long you have to pay off a loan. Shorter terms mean higher monthly payments with less interest. Longer terms flip this scenario, meaning more interest is paid, but the monthly payment is lower.

When you’re looking at monthly payments, it’s important to balance dueling goals of affordability while at the same time trying to pay as little interest as possible.

One strategy that might be helpful is to put extra money toward the monthly principal payment when you can. This will result in paying less total interest over time than if you just made your regular monthly payment.

You can also take a look at recasting your mortgage to lower your payment permanently. When you recast, your term and interest rate stays the same, but the loan balance is lowered to reflect the payments you’ve already made. Your payment is lower because the interest rate and term remain.

One thing to know about recasting is that sometimes there’s a fee, and some lenders limit how often you do it or if they let you do it at all. However, it can be an option worth looking into, because it might be cheaper than the closing costs on a refinance.

The Best Home Loan Option For You

Any good calculator will help determine what might be a good loan product for you based on what you might qualify for. You’ll usually see several options.

It’s worth noting that you must qualify, so don’t take what the mortgage calculator says as gospel. A Home Loan Expert will better be able to tell you what you qualify for when they take a more detailed look at your financial history. However, it does give you a starting point in terms of things to think about.

Whether The Home Is Too Expensive

Another thing a mortgage calculator is very good for is determining how much house you can afford. This is based on factors like your income, credit score and your outstanding debt. Not only is the monthly payment important, but you should also be aware of how much you need to have for a down payment.

As important as it is to have this estimate, it’s also critical that you don’t overspend on the house by not considering emergency funds and any other financial goals. You don’t want to put yourself in a position where you’re house poor and unable to afford retiring or going on vacation.

Determining The Right Down Payment Amount

A purchase calculator can help you determine the down payment you need. There are minimum down payments for various loan types, but even beyond that, a higher down payment can mean a lower monthly payment and the ability to avoid mortgage insurance.

On the flip side, a higher down payment represents a more significant hurdle, particularly for first-time home buyers who don’t have an existing home to sell to help fund that down payment. The calculator can show you options so that you can balance the amount of the down payment with the monthly mortgage payment itself.

If You Should Rent Vs. Own A Home

There are many advantages to owning a home versus renting. Among them is the fact that you gain equity with each payment, as opposed to giving your money to a landlord. As an owner, you also gain the ability to paint your living room any color your desire.

However, there’s a mathematical piece to this as well. You have to know how much you need for a down payment, and whether owning a home will be cheaper or require you to pay more when looking at the monthly cost of homeownership.

In many cases, it’s better to get a mortgage, because the rate can be fixed for the life of the loan. There are very few controls that can stop landlords from raising your rent every year if they want to. However, not every situation is the same.

Источник: https://www.rocketmortgage.com/resources-cmsassets/

How To Calculate Your Mortgage Payment: Fixed, Variable, and More

Understanding your mortgage helps you make better financial decisions. Instead of just accepting offers blindly, it’s wise to look at the numbers behind any loan—especially a significant loan like a home loan.

Key Takeaways

  • You can calculate your monthly mortgage payment by using a mortgage calculator or doing it by hand.
  • You'll need to gather information about the mortgage's principal and interest rate, the length of the loan, and more.
  • Before you apply for loans, review your income and determine how much you’re comfortable spending on a mortgage payment.

Getting Started With Calculating Your Mortgage

People tend to focus on the monthly payment, but there are other important features that you can use to analyze your mortgage, such as:

  • Comparing the monthly payment for several different home loans
  • Figuring how much you pay in interest monthly, and over the life of the loan
  • Tallying how much you actually pay off over the life of the loan, versus the principal borrowed, to see how much you actually paid extra

Use the mortgage calculator below to get a sense of what your monthly mortgage payment could end up being,

The Inputs

Start by gathering the information needed to calculate your payments and understand other aspects of the loan. You need the details below. The letter in parentheses tells you where we’ll use these items in calculations (if you choose to calculate this yourself, but you can also use online calculators):

  • The loan amount (P) or principal, which is the home-purchase price plus any other charges, minus the down payment
  • The annual interest rate (r) on the loan, but beware that this is not necessarily the APR, because the mortgage is paid monthly, not annually, and that creates a slight difference between the APR and the interest rate
  • The number of years (t) you have to repay, also known as the "term"
  • The number of payments per year (n), which would be 12 for monthly payments
  • The type of loan: For example, fixed-rate, interest-only, adjustable
  • The market value of the home
  • Your monthly income

Calculations for Different Loans

The calculation you use depends on the type of loan you have. Most home loans are standard fixed-rate loans. For example, standard 30-year or 15-year mortgages keep the same interest rate and monthly payment for their duration.

For these fixed loans, use the formula below to calculate the payment. Note that the carat (^) indicates that you’re raising a number to the power indicated after the carat.

Payment = P x (r / n) x (1 + r / n)^n(t)] / (1 + r / n)^n(t) - 1

Example of Payment Calculation

Suppose you borrow $100,000 at 6% for 30 years, to be repaid monthly. What is the monthly payment? The monthly payment is $599.55.

Plug those numbers into the payment formula:

  1. {100,000 x (.06 / 12) x [1 + (.06 / 12)^12(30)]} / {[1 + (.06 / 12)^12(30)] - 1}
  2. (100,000 x .005 x 6.022575) / 5.022575
  3. 3011.288 / 5.022575 = 599.55

You can check your math with the Loan Amortization Calculator spreadsheet.

How Much Interest Do You Pay?

Your mortgage payment is important, but you also need to know how much of it gets applied to interest each month. A portion of each monthly payment goes toward your interest cost, and the remainder pays down your loan balance. Note that you might also have taxes and insurance included in your monthly payment, but those are separate from your loan calculations.

An amortization table can show you—month-by-month—exactly what happens with each payment. You can create amortization tables by hand, or use a free online calculator and spreadsheet to do the job for you. Take a look at how much total interest you pay over the life of your loan. With that information, you can decide whether you want to save money by:

  • Borrowing less (by choosing a less expensive home or making a larger down payment)
  • Paying extra each month
  • Finding a lower interest rate
  • Choosing a shorter-term loan (15 years instead of 30 years, for example) to speed up your debt repayment

Shorter-term loans like 15-year mortgages often have lower rates than 30-year loans. Although you would have a bigger monthly payment with a 15-year mortgage, you would spend less on interest.

Interest-Only Loan Payment Calculation Formula

Interest-only loans are much easier to calculate. Unfortunately, you don’t pay down the loan with each required payment, but you can typically pay extra each month if you want to reduce your debt.

Example: Suppose you borrow $100,000 at 6% using an interest-only loan with monthly payments. What is the payment? The payment is $500.

Loan Payment = Amount x (Interest Rate / 12)

Loan payment = $100,000 x (.06 / 12) = $500

Check your math with the Interest Only Calculator on Google Sheets.

In the example above, the interest-only payment is $500, and it will remain the same until:

  • You make additional payments, above and beyond the required minimum payment. Doing so will reduce your loan balance, but your required payment might not change right away.
  • After a certain number of years, you’re required to start making amortizing payments to pay down the debt.
  • Your loan may require a balloon payment to pay off the loan entirely.

Adjustable-Rate Mortgage Payment Calculation

Adjustable-rate mortgages (ARMs) feature interest rates that can change, resulting in a new monthly payment. To calculate that payment:

  • Determine how many months or payments are left.
  • Create a new amortization schedule for the length of time remaining (see how to do that).
  • Use the outstanding loan balance as the new loan amount.
  • Enter the new (or future) interest rate.

Example: You have a hybrid-ARM loan balance of $100,000, and there are ten years left on the loan. Your interest rate is about to adjust to 5%. What will the monthly payment be? The payment will be $1,060.66.

Know How Much You Own (Equity)

It’s crucial to understand how much of your home you actually own. Of course, you own the home—but until it’s paid off, your lender has a lien on the property, so it’s not yours free-and-clear. The value that you own, known as your "home equity," is the home’s market value minus any outstanding loan balance.

You might want to calculate your equity for several reasons.

  • Your loan-to-value (LTV) ratio is critical, because lenders look for a minimum ratio before approving loans. If you want to refinance or figure out how big your down payment needs to be on your next home, you need to know the LTV ratio.
  • Your net worth is based on how much of your home you actually own. Having a one million-dollar home doesn’t do you much good if you owe $999,000 on the property.
  • You can borrow against your home using second mortgages and home equity lines of credit (HELOCs). Lenders often prefer an LTV below 80% to approve a loan, but some lenders go higher.

Can You Afford the Loan?

Lenders tend to offer you the largest loan that they’ll approve you for by using their standards for an acceptable debt-to-income ratio. However, you don’t need to take the full amount—and it’s often a good idea to borrow less than the maximum available.

Before you apply for loans or visit houses, review your income and your typical monthly expenses to determine how much you’re comfortable spending on a mortgage payment. Once you know that number, you can start talking to lenders and looking at debt-to-income ratios. If you do it the other way around (ignoring your expenses and basing your housing payment solely on your income), you might start shopping for more expensive homes than you can afford, which affects your lifestyle and leaves you vulnerable to surprises. 

It’s safest to buy less and enjoy some wiggle room each month. Struggling to keep up with payments is stressful and risky, and it prevents you from saving for other goals.

Frequently Asked Questions (FAQs)

What is a fixed-rate mortgage?

A fixed-rate mortgage is a home loan that has the same interest rate for the life of the loan. This means your monthly principal and interest payment will stay the same. The proportion of how much of your payment goes toward interest and principal will change each month due to amortization. Each month, a little more of your payment goes toward principal and a little less goes toward interest.

What is an interest-only mortgage?

An interest-only mortgage is a home loan that allows you to only pay the interest for the first several years you have the mortgage. After that period, you'll need to pay principal and interest, which means your payments will be significantly higher. You can make principal payments during the interest-only period, but you're not required to.

Источник: https://www.thebalance.com/calculate-mortgage-315668

Mortgage calculators & tools

  • How much can I borrow? expandable section

    The amount you can borrow for your mortgage depends on a number of factors, these include; your salary, bill payments, any additional outgoing payments including examples such as student loans or credit card bills.

    These factors are taken into consideration when a mortgage lender calculates how much they could ideally lend you for a mortgage.

    Interest rates are also a consideration and in most cases mortgage lenders will ensure you will still be able to repay the amount you borrow if interest rates were to increase. Our mortgage calculators can give you a rough idea of how much you could borrow for your mortgage by taking the above factors into consideration.

  • How much deposit do I need to buy a house? expandable section

    If you are looking to buy a property, you will need to have a deposit which is essentially money that you have saved that will go towards the cost of the property.

    In most cases, the larger the deposit contribution you make, the lower your interest rate could be. The amount of deposit you are required to have saved before you purchase a property depends on a number of factors, such as the type of mortgage you are looking to get and your own financial circumstances.

    You can use our mortgage calculators to get an estimate of the deposit amount you’ll need, to purchase the property you have in mind. 

  • How is my affordability assessed? expandable section

    In order to assess your affordability for a mortgage, a lender will typically ask for proof of your income as well as any living expenses they need to consider.

    They will then run a credit reference check to ensure you will be able to maintain the mortgage payments and the lending amount is correct for you. You may be asked for supporting documentation during an affordability assessment such as your proof ID, proof of address, proof of income and any additional information which may support your application.

    You can use our mortgage calculators to see roughly how much you could borrow – they’re free to use and there are no credit checks made.

  • What are mortgage interest rates? expandable section

    Mortgage interest rates are the additional cost associated with borrowing from a lender to buy a property. Essentially, the higher the interest rate, the higher your monthly mortgage payments are likely to be.

    The type of mortgage you choose will determine the type of interest you can expect to pay, whether this is a Fixed-rate or Variable mortgage. Fixed-rate mortgages generally come with a higher interest rate, whilst a Variable mortgage will be lower with no guarantee of your interest rates not rising.

    Our mortgage calculators will show what mortgage rates are available to you and let you compare the monthly payments.

  • Источник: https://www.halifax.co.uk/mortgages/mortgage-calculator.html

    Excel PMT Function

    Contextures

    The PMT function calculates the payment for a loan that has constant payments and a constant interest rate. Also see the Loan Payment Schedule Template page

    How Could You Use PMT?

    The PMT function returns a payment amount, so you can use it to:

    • Calculate the monthly payment due on a personal loan
    • Calculate the payment due for a Canadian mortgage loan, with interest compounded bi-annually

    PMT Syntax

    The PMT function has the following syntax:

    • PMT(rate, nper, pv, [fv], [type])
      • Rate is the interest rate for the loan.
      • Nper is the total number of payments for the loan.
      • Pv is the present value; also known as the principal.
      • Fv is optional. It is the future value, or the balance that you want to have left after the last payment. If fv is omitted, the fv is assumed to be zero.
      • Type is optional. If omitted, it is assumed to be zero, and payments are due at the end of the period. Use 1 in this argument if payments are due at the beginning of the period.
    PMT syntax

    PMT Traps

    • The payment calculated by PMT includes principal and interest but does not include taxes, or other fees that might be associated with the loan.
    • Canadian mortgage payments have the interest compounded bi-annually, even if the payments are made monthly. The Rate argument must be adjusted to account for this

    Example 1: Calculate Payment on Personal Loan

    To see the steps for calculating a simple loan payment with the PMT function, watch this short video. The written instructions are below the video.

    With the PMT function, you can return a payment amount, based on loan information. In this example:

    • The loan amount is $10,000
    • The interest rate is 5% annually
    • The loan is for a 4 year term, with 48 monthly payments

    In cell C6, the PMT function calculates the monthly payment, based on the annual rate, which is divided by 12 to get the monthly rate, the number of payments (periods) and the loan amount (present value):

    =PMT(C2/12,C3,C4)

    PMT loan calculation

    The payment, -230.29, is calculated as a negative amount, because you are paying that amount out of your bank account.

    If you would prefer to see the result as a positive number, you can use a minus sign before the PMT function:

    =-PMT(C2/12,C3,C4)

    Example 2: Calculate the Payment on a Canadian Mortgage

    For Canadian mortgage loans, the interest is compounded semi-annually, rather than monthly, even if the payments are monthly. To calculate the payments, you need a different rate calculation, instead of the simple Rate/12.

    Note: Visit your bank's website, or check with your banker, to confirm how your bank will calculate the payments.

    In this example:

    • The mortgage loan amount is $100,000
    • The interest rate is 5% annually, compounded semi-annually
    • The loan is for a 20 year term, with 240 monthly payments

    In cell C6, the PMT function calculates the monthly payment, based on the annual rate, the number of payments (periods) and the loan amount (present value):

    =PMT((C2/2+1)^(1/6)-1,C3,C4)

    Instead of simply dividing the rate by 12, the rate calculation is: (Rate/2+1)^(1/6)-1

    • (Rate /2 +1) is the semi-annual interest as a proportion of the annual rate. In this example, the rate is 5/2 = 2.5% each 6 months. So at the end of 6 months you owe 1.025 of what you owed at the beginning.
    • Payments are monthly, and there are 6 months in a half year, so the proportional rate is raised to the power of 1/6. In this example, the monthly rate is 1.025 ^(1/6)=1.00412391547
    • The 1, that was added for the rate calculation, is subtracted

    PMT loan calculation

    The payment, -657.13, is calculated as a negative amount, because you are paying that amount out of your bank account.

    If you would prefer to see the result as a positive number, you can use a minus sign before the PMT function:

    =-PMT((C2/2+1)^(1/6)-1,C3,C4)

    Example 3: Enhanced Loan Calculator

    In the previous examples, you had to enter the total number of payments due, after calculating that number -- number of years in the loan term, times the number of payments per year.

    To make things easier, this Excel loan payment calculator lets you select the payment frequency from a drop down list of options.

    paymentcalculator02

    In the sample file, the Lists sheet has a lookup table of frequencies and number of payments per year, for each frequency.

    paymentcalculator04

    Based on the frequency that you select, a number of payments per year is calculated in cell E5, using a VLOOKUP formula.

    =IFERROR(VLOOKUP(C5,FreqLU,2,0),"")

    paymentcalculator05

    The payment amount is calculated with the PMT function:

    =IFERROR(PMT(C7/E5,E6,-C4),"")

    In this workbook, there is a minus sign before the present value variable, so the monthly payment is shown as a positive number. You can omit the minus sign, to show the payment as a negative number.

    paymentcalculator06

    Example 4: Payment Date Calculations

    In this example, the PMT function is used at the top of the worksheet, to calculate the monthly payment amount. Here is the formula in cell E2, which is named LoanPmt.

    • =-PMT(LoanRate/12,LoanMths,LoanAmt)

    PMT function calculates payment amount

    Payment Date Table

    The first payment date is also entered at the top of the sheet, in cell A2, and a payment table calculates all the payment days, plus the interest and principal amounts each month.

    NOTE: There are 48 rows in the table, and you can add more rows if needed. The formulas should fill in automatically.

    Table Formulas

    Here are the formulas used in row 7 of the payment date table:

    • Pay Date: =IF(G7="","", DATE(YEAR(LoanStart), MONTH(LoanStart)+G7-1, DAY(LoanStart)))
    • Outstanding: =IF(G7="","",LoanAmt-SUM(E$6:E6))
    • Mth Pmt: =IF(G7="","",LoanPmt)
    • Interest: =IF(G7="","",-IPMT(LoanRate/12,G7,LoanMths,LoanAmt))
    • Principal: =IF(G7="","",C7-D7)
    • Total Princ Paid: =IF(G7="","",SUM(E$6:E7))
    • Pmt Num: =IF(MAX(G$6:G6)<LoanMths,SUM(G6,1),"")

    payment date formulas

    Last Payment Highlighting

    In the table, the latest payment row is highlighted, based on a Conditional Formatting rule

    • =$A7=INDEX($A$7:$A$54,MATCH(TODAY(),$A$7:$A$54,1))

    In the Conditional Formatting rule:

    • MATCH looks for the current date (TODAY function) in the payment date list
    • If the current date is not found, MATCH returns the location of the latest date before the current date
    • Then, the INDEX function returns the date from that location in the list of payment dates
    • If the date in the current row matches that date, the row is highlighted with light orange

    condtional formatting rule

    Get the PMT Function Files

    • Examples 1 & 2: To see the formulas used in examples 1 and 2, get the PMT function sample workbook. The file is zipped, and is in xlsx file format.

    Excel Functions Tutorials

    Payment Calculation Table

    Loan Payment Schedule Template

    Cost Calculator, Annual

    SUM Function

    VLOOKUP Function

    INDEX function and MATCH Function

    Count Function

    INDIRECT Function

    Excel Function Video Tutorials

    Last updated: July 12, 2021 11:47 AM

    Источник: https://www.contextures.com/excelpmtfunction.html

    Use our mortgage interest calculator to find out how much extra you'd pay if your mortgage rate increased by between 0.25% and 3%. Just enter your current interest rate, mortgage term and outstanding loan and we’ll do the rest.

    How to beat mortgage interest rate rises

    If you're on a variable-rate deal such as a discount or tracker mortgage, changes to the Bank of England base rate or your bank's standard variable rate will have an immediate impact on how much you're paying each month.

    If this happens, it's worth investigating whether you could save money by remortgaging.

    A rate rise can also hit you hard when you reach the end of an initial deal period - for example, if you've reached the end of your fixed-rate mortgage's introductory period, which might be two or five years.

    When this period runs out, you’ll usually revert to your lender’s standard variable rate (SVR), which is likely to be a lot higher.

    In most cases, you’ll be able to get a better deal if you remortgage your home at this point, as you’ll have built up more equity in your property (unless you had an interest-only mortgage) and introductory rates on new deals will almost always be cheaper than your current lender’s SVR.

    More mortgage calculators

    • Mortgage repayment calculator: shopping around for deals? See how much you would pay each month based on the mortgage's interest rate and fees combined with the amount you're borrowing and the mortgage term.
    • Mortgage overpayment calculator: find out how much more quickly you could pay off your mortgage if you made overpayments - as well as how much money you could save.

    See our full list of mortgage calculators for more help crunching the numbers. 

    Источник: https://www.which.co.uk/money/mortgages-and-property/mortgage-calculators/mortgage-interest-calculator-at51d3n0g9r4

    If you're considering refinancing your mortgage or purchasing a new home, you can calculate your monthly mortgage payments using a specific calculation formula. For this formula you will need some basic numbers that are available in your mortgage documents.

    The Formula

    To calculate a mortgage payment for a fixed-rate mortgage, you will need to know your principal amount, interest rate, and length of loan:

    • Principal amount: This is the amount of the mortgage or amount you want to borrow. In the example below, this amount is $100,000.
    • Interest rate: This is the interest rate the financial institution or bank is charging. In the example below, this rate is 5%.
    • Length of loan: This is the term or number of years of the loan. In the example below, the term is 15 years.
    Related Articles

    There are a set of standard abbreviations for these amounts and the mathematical processes used in these calculations:

    AbbreviationRepresents
    APR Annual Percentage Rate
    i Interest Rate in Decimal Form
    I Monthly Interest Rate
    PF Payment Frequency
    n Number of Payments
    L Length of Loan
    T Term of Loan
    M Monthly Mortgage Payment
    P Principal Amount
    / Division Symbol
    x Multiplication Symbol

    The overall equation for calculating payments is: M = P [I(1 + T)n ] / [ (1 + I)n - 1]. Here is the formula broken down into six steps:

    Step 1: Convert Interest Rate into Decimal

    The first step to calculating monthly mortgage payments is to convert the APR into a decimal fraction. To do so:

    i = APR/100

    For example, if you have a 5% interest rate: 5/100 = .05. In this example, therefore, i = .05

    Step 2: Calculate Monthly Interest Rate

    Next, determine the monthly interest rate. To do so, divide the decimal interest rate calculated in step one by payment frequency:

    I = i/PF

    If the loan must be paid every month in a year, 12 is the payment frequency. For example: .05/12 = .004167. In this example, therefore, I = .004167.

    Step 3: Determine Total Number of Payments

    The third step to calculating mortgage payments is to determine how many payments you will make over the life of the loan. To do so, multiply the length of the loan by payment frequency:

    n = L x PF

    For example, if you have a 15-year loan and make monthly payments: 15 x 12 = 180. Therefore, over the entire life of your mortgage, you would make 180 payments. In this example, therefore, n = 180.

    Step 4: Calculate the Term

    Fifth, calculate the term of the mortgage. The formula for this calculation is:

    T = (1 + I)n

    Using the example of 0.004167, the calculation would be: 1 + 0.004167 = (1.004167)180 = 2.11383. In this example, therefore, T = 2.11383.

    Step 5: Calculate Monthly Mortgage Payment

    Finally, it is time to calculate the total amount of monthly mortgage payment. Assuming that interest is compounded monthly, for a fixed-rate mortgage, the formula is:

    M = P (I x T) / T -1)

    In this example: 100,000 [(.004167 x 2.11383) / (2.11383 - 1)] = 100,000 (.0088083 / 1.11383) 100,000 x .0079081 = 790.81. Therefore, in this example: M = $790.81.

    Determine Overall Interest

    If you want to know how much interest you'll pay over the life of the loan, multiply the amount of your monthly payment by the term of the loan and then subtract the principal. For example: $790.81 multiplied by 180 payments (15 years) equals $142,345.80 minus the loan principal of $100,000 equals $42,345.80. Therefore, in the 15 years of the loan, you'll pay about $42,345 in interest.

    If You Want to Pay More

    Making a larger-than-required mortgage payment or additional payments can reduce the amount of interest you pay on the loan. Several online calculators help you determine how making an additional payment will affect your loan:

    • Ultimate Calculators: In addition to the basics of your loan, this "ultimate" calculator allows you to input a custom payment amount, or provide a lump sum payment amount or double-up payment amount as you would like. It also allows users to input an annual interest rate increase, which may assist with calculating payments and savings for an adjustable-rate mortgage. Once provided, the calculator provides you with information about how many payments are required with the additional payments and how much less you will pay in interest due to the additional payments.
    • Free Online Calculator Use: This extra payment calculator allows users to input an additional amount they will pay each month or an additional one-time payment. It provides a payoff comparison detailing the number of months you will pay on the mortgage and the amount of interest you will pay.

    Calculator for Computing Monthly Payment

    This amortization calculator gives you a simple way to estimate your monthly payment:

    Calculating Your Payment

    Calculating your mortgage payment is made easier by breaking the formula provided above into several steps, as is shown. Determining the amount you will pay each month helps you determine whether you can afford to borrow the full amount offered or purchase the house with which you've fallen in love.

    © 2021 LoveToKnow Media. All rights reserved.

    Источник: https://mortgage.lovetoknow.com/Calculate_Mortgage_Payments_Formula

    Excel PMT Function

    Contextures

    The North central high school softball function calculates the payment for a loan that has constant payments and a constant interest rate. Also see the Loan Payment Schedule Template page

    How Could You Use PMT?

    The PMT function returns a payment amount, so you can use it to:

    • Calculate the monthly payment due on a personal loan
    • Calculate the payment due for a Canadian mortgage loan, with interest compounded bi-annually

    PMT Syntax

    The PMT function has the following syntax:

    • PMT(rate, nper, pv, [fv], [type]) www walmart credit card is the interest rate for the loan.
    • Nper is the total number of payments for the loan.
    • Pv is the present value; also known as the principal.
    • Fv is optional. It is the future value, or the balance that at and t iphone you want to have left after the last payment. If fv is omitted, the fv is assumed to be zero.
    • Type is optional. If omitted, it is assumed to be zero, and payments are due at the end of the period. Use 1 in this argument if payments are due at the beginning of the period.
    PMT syntax

    PMT Traps

    • The payment calculated by PMT includes principal and interest but does not include taxes, or other fees that might be associated with the loan.
    • Canadian mortgage payments have the interest compounded bi-annually, even if the payments are made monthly. The Rate argument must be adjusted to account for this

    Example 1: Calculate Payment on Personal Loan

    To see the steps for calculating a simple loan payment with the PMT function, watch this short video. The written instructions are below the citizens state bank hayfield mn the PMT function, you can return a payment amount, based on loan information. In this example:

    • The loan amount is $10,000
    • The interest rate is 5% annually
    • The loan is for a 4 year term, with 48 monthly payments

    In cell How to determine mortgage payments formula, the PMT function calculates the monthly payment, based on the annual rate, which is divided by 12 to get the monthly rate, the number of payments (periods) and the loan amount (present value):

    =PMT(C2/12,C3,C4)

    PMT loan calculation

    The payment, -230.29, is calculated as a ameris online banking personal amount, because you are paying that amount out of your bank account.

    If you would prefer to see the result as a positive number, you can use a minus sign before the PMT function:

    =-PMT(C2/12,C3,C4)

    Example 2: Calculate the Payment on a Canadian Mortgage

    For How to determine mortgage payments formula mortgage loans, the interest is compounded semi-annually, rather than monthly, even if the payments are monthly. To calculate how to determine mortgage payments formula the payments, you need a different rate calculation, instead of the simple Rate/12.

    Note: Visit your bank's website, or check with your banker, to confirm how your bank will calculate the payments.

    In this example:

    • The mortgage loan amount is $100,000
    • The interest rate is 5% annually, compounded semi-annually
    • The loan is for a 20 year term, with 240 monthly payments

    In cell C6, the PMT function calculates the monthly payment, based on the annual rate, the chase sapphire reserve credit card customer service of payments (periods) and the loan amount (present value):

    =PMT((C2/2+1)^(1/6)-1,C3,C4)

    Instead of simply dividing the rate by 12, the rate calculation is: (Rate/2+1)^(1/6)-1

    • (Rate /2 +1) is the semi-annual interest as a proportion of the annual rate. In this example, the rate is 5/2 = 2.5% each 6 months. So at the end of 6 months you owe 1.025 of what you owed at the beginning.
    • Payments are monthly, and there are 6 months in a half year, so the proportional rate is raised to the power of 1/6. In this example, the monthly rate is 1.025 ^(1/6)=1.00412391547
    • The 1, that was added for the rate calculation, is subtracted

    PMT loan calculation

    The payment, -657.13, is calculated as a negative amount, because you are paying that amount out of your bank account.

    If you would prefer to see the result as a positive number, you can use a minus sign before the PMT function:

    =-PMT((C2/2+1)^(1/6)-1,C3,C4)

    Example 3: Enhanced Loan Calculator

    In the previous examples, you had to enter the total number of payments due, after calculating that number -- number of years in the loan term, times the number of payments per year.

    To make things easier, this Excel loan payment calculator lets you select the payment frequency from a drop down list of options.

    paymentcalculator02

    In the sample file, the Lists sheet has a lookup table of frequencies and number of payments per year, for each frequency.

    paymentcalculator04

    Based on the frequency credit one platinum visa you select, a number of payments per year is calculated in cell E5, using a VLOOKUP formula.

    =IFERROR(VLOOKUP(C5,FreqLU,2,0),"")

    paymentcalculator05

    The payment amount is calculated with the PMT function:

    =IFERROR(PMT(C7/E5,E6,-C4),"")

    In this workbook, there is a minus sign before the present value variable, so the monthly payment is shown as how to determine mortgage payments formula positive number. You can omit the minus sign, to show the payment as a negative number.

    paymentcalculator06

    Example 4: Payment Date Calculations

    In this example, the PMT function is used at the top of the worksheet, to calculate the monthly payment amount. Here is the formula in cell E2, which is named LoanPmt.

    • =-PMT(LoanRate/12,LoanMths,LoanAmt)

    PMT function calculates payment amount

    Payment Date Table

    The first payment date is also entered at the top of the sheet, in cell A2, and a payment table calculates all the payment days, plus the interest and principal amounts each month.

    NOTE: There are 48 rows in the table, and you can add more rows if needed. The formulas should fill in automatically.

    Table Formulas

    Here are the formulas used in row 7 of the payment date table:

    • Pay Date: =IF(G7="","", DATE(YEAR(LoanStart), MONTH(LoanStart)+G7-1, DAY(LoanStart)))
    • Outstanding: =IF(G7="","",LoanAmt-SUM(E$6:E6))
    • Mth Pmt: =IF(G7="","",LoanPmt)
    • Interest: =IF(G7="","",-IPMT(LoanRate/12,G7,LoanMths,LoanAmt))
    • Principal: =IF(G7="","",C7-D7)
    • Total Princ Paid: =IF(G7="","",SUM(E$6:E7))
    • Pmt Num: =IF(MAX(G$6:G6)<LoanMths,SUM(G6,1),"")

    payment date formulas

    In the table, the latest payment row is highlighted, based on a Conditional Formatting rule

    • =$A7=INDEX($A$7:$A$54,MATCH(TODAY(),$A$7:$A$54,1))

    In the Conditional Formatting rule:

    • MATCH looks for the current date (TODAY function) in the payment date list
    • If the current date is not found, MATCH returns the location of the latest date before the current date
    • Then, the INDEX function returns the date from that location in the list of payment dates
    • If the date in the current row matches that date, the row is highlighted with light orange

    condtional formatting rule

    Get the PMT Function Files

    • Examples 1 & 2: To see the formulas used in examples 1 and 2, get the PMT function sample workbook. The file is zipped, and is in xlsx file format.

    Excel Functions Tutorials

    Payment Calculation Table

    Loan Payment Schedule Template

    Cost Calculator, Annual

    SUM Function

    VLOOKUP Function

    INDEX function and MATCH Function

    Count Function

    INDIRECT Function

    Excel Function Video Tutorials

    Last updated: July 12, 2021 11:47 AM

    Источник: https://www.contextures.com/excelpmtfunction.html

    Mortgage calculators & tools

  • How much can I borrow? expandable section

    The amount you can borrow for your mortgage depends on a number of factors, these include; your salary, bill payments, any additional outgoing payments including examples such as student loans or credit card bills.

    These factors are taken into consideration when a mortgage lender calculates how much they could ideally lend you for a mortgage.

    Interest rates are also a consideration and in most cases mortgage lenders will ensure you will still be able to repay the amount you borrow if interest rates were to increase. Our mortgage calculators can give you a rough idea of how much you could borrow for your mortgage by taking the above factors into consideration.

  • How much deposit do I need to buy a house? expandable section

    If you are looking to buy a property, you will need to have a deposit which is essentially money that you have saved that will go towards the cost of the property.

    In most cases, the larger the deposit contribution you make, the lower your interest rate could be. The amount of deposit you are required to have saved before you purchase a property depends on a number of factors, such as the type of mortgage you are looking to get and your own financial circumstances.

    You can use our mortgage calculators to get an estimate of the deposit amount you’ll need, to purchase the property you have in mind. 

  • How is my affordability assessed? expandable section

    In order to assess your affordability for a mortgage, a lender will typically ask for proof of your income as well as any living expenses they need to consider.

    They will then run a credit reference check to ensure you will be able to maintain the mortgage payments and the lending how to determine mortgage payments formula is correct for you. You may be asked for supporting documentation during an affordability assessment such as your proof ID, proof of address, proof of income and any additional information which may support your application.

    You can use our mortgage calculators to see roughly how much you could borrow – they’re free to use and there are no credit checks made.

  • What are mortgage interest rates? expandable section

    Mortgage interest rates are the additional cost associated with borrowing from a lender to buy a property. Essentially, the higher the interest rate, the higher your monthly mortgage payments are likely to be.

    The type of mortgage you choose will determine the type of interest you can expect to pay, whether this is a Fixed-rate or Variable mortgage. Fixed-rate mortgages generally come with a higher interest rate, whilst a Variable bank of america how to set up direct deposit will be lower with no guarantee of your interest rates not rising.

    Our mortgage calculators will show what mortgage rates are available to you and let you compare the monthly bank of america cash rewards credit card credit score https://www.halifax.co.uk/mortgages/mortgage-calculator.html

    How To Calculate Your Mortgage, And How It Can Help You Save Money Long-Term

    Whichever mortgage calculator you use, its objective should always be to help you feel more informed on how to get a mortgage and your budget for buying a home, or to decide whether to move forward with a refinance. It all depends on your lifestyle and personal goals.

    Below are some of the questions a mortgage calculator can answer.

    The Length Of A Home Loan Term

    The loan term refers to how long you have to pay off a loan. Shorter terms mean higher monthly payments with less interest. Longer terms flip this scenario, meaning more interest is paid, but the monthly payment is lower.

    When you’re looking at monthly payments, it’s important to balance dueling goals of affordability while at the same time trying to pay as little interest as possible.

    One strategy that might be helpful is to put extra money toward the monthly principal payment when you can. This will result in paying less total interest over time than if you just made your regular monthly payment.

    You can also take a look at recasting your mortgage to lower your payment permanently. When you recast, your term and interest rate stays the same, but the loan balance is lowered to reflect the payments you’ve already made. Your payment is lower because the interest rate and term remain.

    One thing to know about recasting is that sometimes there’s a fee, and some lenders limit how often you do it or if they let you do it at all. However, it can be an option worth looking into, because it might be cheaper than the closing costs on a refinance.

    The Best Home Loan Option For You

    Any good calculator will help determine what might be a good loan product for you based on what you might qualify for. You’ll usually see several options.

    It’s worth noting that you homes for sale in scottsdale az 85257 qualify, so don’t take what the mortgage calculator says as gospel. A Home Loan Expert will better be able to tell you what you qualify for when they take a more detailed look at your financial history. However, it does give you a starting point in terms of things to think about.

    Whether The Home Is Too Expensive

    Another thing a mortgage calculator is very good for is determining how much house you can afford. This is based on factors like your income, credit score and your outstanding debt. Not only is the monthly payment important, but you should also be aware of how much you need to have for a down payment.

    As important as it is to have this estimate, it’s also critical that you don’t overspend on the house by not considering emergency funds and any other financial goals. You don’t want to put yourself in a position where you’re house poor and unable to afford retiring or going on vacation.

    Determining The Right Down Payment Amount

    A purchase calculator can help you determine the down payment you need. There are minimum down payments for various loan types, but even beyond that, a higher down payment can mean a lower monthly payment and the ability to avoid mortgage insurance.

    On the flip side, a higher down payment represents a more significant hurdle, particularly for first-time home buyers who don’t have an existing home to sell to help fund that down payment. The calculator can show you options so that you can balance the amount of the down payment with the monthly mortgage payment itself.

    If You Should Rent Vs. Own A Home

    There are many advantages to owning a home versus renting. Among them is the fact that you gain equity with each payment, as opposed to giving your money to a landlord. As an owner, you also gain the ability to paint your living room any color your desire.

    However, there’s a mathematical piece to this as well. You have to know how much you need for a down payment, and whether owning a home will be cheaper or require you to pay more when looking at the monthly cost of homeownership.

    In many cases, it’s better to get a mortgage, because the rate can be fixed for the life of the loan. There are very few controls that can stop landlords from raising your rent every year if they want to. However, not every situation is the same.

    Источник: https://www.rocketmortgage.com/resources-cmsassets/

    Use our mortgage interest calculator to find out how much extra you'd pay if your mortgage rate increased by between 0.25% and 3%. Just enter your current interest rate, mortgage term and outstanding loan and we’ll do the rest.

    How to beat mortgage interest rate rises

    If you're on a variable-rate deal such as a discount or tracker mortgage, changes to the Bank of England base rate or your bank's standard variable rate will have an immediate impact on how much you're paying each month.

    If this happens, it's worth investigating whether you could save money by remortgaging.

    A rate rise can also hit you hard when you reach the end of an initial deal period - for example, if you've reached the end of your fixed-rate mortgage's introductory period, which might be two or five years.

    When this period runs out, you’ll usually how to determine mortgage payments formula to your lender’s standard variable rate (SVR), which is likely to be a lot higher.

    In most cases, you’ll be able to get a better deal if you remortgage your home at this point, as you’ll have built up more equity in your property (unless you had an interest-only mortgage) and introductory rates on new deals will almost always be cheaper than your current lender’s How to determine mortgage payments formula mortgage calculators

    • Mortgage repayment calculator: shopping around for deals? See how much you would pay each month based on the mortgage's interest rate and fees combined with the amount you're borrowing and the mortgage term.
    • Mortgage overpayment calculator: find out how much more quickly you could pay off your mortgage if you made overpayments - as well as how much money you could save.

    See our full list of mortgage calculators for more help crunching the numbers. 

    Источник: https://www.which.co.uk/money/mortgages-and-property/mortgage-calculators/mortgage-interest-calculator-at51d3n0g9r4

    How To Calculate Your Mortgage Payment: Fixed, Variable, and More

    Understanding your mortgage helps you make better financial decisions. Instead of just accepting offers blindly, it’s wise to look at the numbers behind any loan—especially a significant loan like a home loan.

    Key Takeaways

    • You can calculate your monthly mortgage payment by using a mortgage calculator or doing it by hand.
    • You'll need to gather information about the mortgage's peoples security bank hallstead pa and interest rate, the length of the loan, and more.
    • Before you apply for loans, review your income and determine how much you’re comfortable spending on a mortgage payment.

    Getting Started With Calculating Your Mortgage

    People tend to focus on the monthly payment, but there are other important features that you can use to analyze your customer service number for pnc bank, such as:

    • Comparing the monthly payment for several different home loans
    • Figuring how much you pay in interest monthly, and over the life of the loan
    • Tallying how much you actually pay off over the life of the loan, versus the principal borrowed, to see how much you actually paid extra

    Use the mortgage calculator below to get a sense of what your monthly mortgage payment could end up being,

    The Inputs

    Start by gathering the information needed to calculate your payments and understand other aspects of the loan. You need the details below. The letter in parentheses tells you where we’ll use these items in calculations (if you choose to calculate this yourself, but you can also use online calculators):

    • The loan amount (P) or principal, which is the home-purchase price plus any other charges, minus the down payment
    • The annual interest rate (r) on the loan, but beware that this is not how to determine mortgage payments formula the APR, because the mortgage is paid monthly, not annually, and that creates a slight difference between the APR and the interest rate
    • The number of years (t) you have to repay, also known as the "term"
    • The number of payments per year (n), which would be 12 for monthly payments
    • The type of loan: For example, fixed-rate, interest-only, adjustable
    • The market value of the home
    • Your monthly income

    Calculations for Different Loans

    The calculation you use depends on the type of loan you have. Most home loans are standard fixed-rate loans. For example, standard 30-year or 15-year mortgages keep the same interest rate and monthly payment for their duration.

    For these fixed loans, use the formula below to calculate the payment. Note that the carat (^) indicates that you’re raising a number to the power indicated after the carat.

    Payment = P x (r / n) x (1 + r / n)^n(t)] / (1 + r / n)^n(t) - 1

    Example of Payment Calculation

    Suppose you borrow $100,000 at 6% for 30 years, to be repaid monthly. What is the monthly payment? The monthly payment is $599.55.

    Plug those numbers into the payment formula:

    1. {100,000 x (.06 / 12) x [1 + (.06 / 12)^12(30)]} / {[1 + (.06 / 12)^12(30)] - 1}
    2. (100,000 x .005 x 6.022575) / 5.022575
    3. 3011.288 / 5.022575 = 599.55

    You can check your math with the Loan Amortization Calculator spreadsheet.

    How Much Interest Do You Pay?

    Your mortgage payment is important, but you also need to know how much of it gets applied to interest each month. A portion of each monthly payment goes toward your interest cost, and the remainder pays down your loan balance. Note that you might also have taxes and insurance included in your monthly payment, but those are separate from your loan calculations.

    An amortization table can show you—month-by-month—exactly what happens with each payment. You can create amortization tables by hand, or use a free online calculator and spreadsheet to do the job for you. Take a look at how much total interest you pay over the life of your how to determine mortgage payments formula. With that how to determine mortgage payments formula, you can decide whether you want to save money by:

    • Borrowing less (by choosing a less expensive home or making a larger down payment)
    • Paying extra each month
    • Finding a lower interest rate
    • Choosing a shorter-term loan (15 years instead of 30 years, for example) to speed up your debt repayment

    Shorter-term loans like 15-year mortgages often have lower rates than 30-year loans. Although you would have a bigger monthly payment with a 15-year mortgage, you would spend less on interest.

    Interest-Only Loan Payment Calculation Formula

    Interest-only loans are much easier to calculate. Unfortunately, you don’t pay down the loan with each required payment, but you can typically best online trading platform indonesia extra each month if you want to reduce your debt.

    Example: Suppose you borrow $100,000 at 6% using an interest-only loan with monthly payments. What is the payment? The payment is $500.

    Loan Payment = Amount x (Interest Rate / 12)

    Loan payment = $100,000 x (.06 / 12) = $500

    Check your math with the Interest Only Calculator on Google Sheets.

    In the example above, the interest-only payment is $500, and it will remain the same until:

    • You make additional payments, above and beyond the required minimum payment. Doing so will reduce your loan balance, but your required payment might not change right away.
    • After a certain number of years, you’re required to start making amortizing payments to pay down the debt.
    • Your loan may require a balloon payment to pay off the loan entirely.

    Adjustable-Rate Mortgage Payment Calculation

    Adjustable-rate mortgages (ARMs) feature interest rates that can change, resulting in a new monthly payment. To calculate that payment:

    • Determine how many months or payments are left.
    • Create a new amortization schedule for the length of time remaining (see how to do that).
    • Use the outstanding loan balance as the new loan amount.
    • Enter the new (or future) interest rate.

    Example: You have chase debit card atm withdrawal limit hybrid-ARM loan balance of $100,000, and there are ten years left on the loan. Your interest rate is about to adjust to 5%. What will the monthly payment be? The payment will be $1,060.66.

    Know How Much You Own (Equity)

    It’s crucial to understand how much of your home you actually own. Of course, you own the home—but until it’s paid off, your lender has a lien on the property, so it’s not yours free-and-clear. The value that you own, known as your "home equity," is the home’s market value minus any outstanding loan balance.

    You might want to calculate your equity for several reasons.

    • Your loan-to-value (LTV) ratio is critical, because lenders look for a minimum ratio before approving loans. If you want to refinance or figure out how big your down payment needs to be on your next home, you need to know the LTV ratio.
    • Your net worth is based on how much of your home you actually own. Having a one million-dollar home doesn’t do you much good if you owe $999,000 on the property.
    • You can borrow against your home using second mortgages and home equity lines of credit (HELOCs). Lenders often prefer an LTV below 80% to approve a loan, but some lenders go higher.

    Can You Afford the Loan?

    Lenders tend to offer you the largest loan that they’ll approve you for by using their standards for an acceptable debt-to-income ratio. However, you don’t need to take the full amount—and it’s often a good idea to borrow less than the maximum available.

    Before you apply for loans or visit houses, review your income and your typical monthly expenses to determine how much you’re comfortable spending on a mortgage payment. Once you know that number, you can start talking to lenders and looking at debt-to-income ratios. If you do it the other way around (ignoring your expenses and basing your housing payment solely on your income), you might start shopping for more expensive homes than you can afford, which affects your lifestyle and leaves you vulnerable to surprises. 

    It’s safest to buy less and buy numbing cream for waxing some wiggle room each month. Struggling to keep up with payments is stressful and risky, and it prevents you from saving for other goals.

    Frequently Asked Questions (FAQs)

    What is a fixed-rate mortgage?

    A fixed-rate mortgage is a home loan that has the same interest rate for the life of the loan. This means your monthly principal and interest payment will stay the same. The proportion of how much of your payment goes toward interest and principal will change each month due to amortization. Each month, a little more of your payment goes toward principal and a little less goes toward interest.

    What is an interest-only mortgage?

    An interest-only mortgage is a home loan that allows you to only pay the interest for the first several years you have the mortgage. After that period, you'll need to 2018 ford f 150 raptor principal and interest, which means your payments will be significantly higher. You can make principal payments during the interest-only period, but you're not required to.

    Источник: https://www.thebalance.com/calculate-mortgage-315668

    How Do I Calculate a Monthly House Payment the closest bank of america around here a 30-Year Fixed Loan?

    Calculating a 30-year fixed-rate mortgage is a straightforward task. In order to find out what your monthly payments might be, you can use a mortgage formula or a calculator. This will give you a good estimation of whether you can afford the mortgage. Home loans are amortized over 30 years with monthly payments that are the same each month. As you begin to pay your mortgage, you will actually pay more in interest. Over time, as the loan decreases, more of your money goes toward the principal.

    1. Make a note of the interest rate, the loan amount and the terms of payment. Fixed-rate mortgage payments stay the same for the life of the loan. Example: $500,000 mortgage loan at 5 percent interest for 30 years making 12 payments a year -- one per month.

    2. Multiply 30 -- the number of years of the loan -- by the number of payments you make each year. For example, 30 X 12 = 360. You are making 360 payments over the course of the loan.

    3. Divide your mortgage interest rate by your total payments. For example, 5 percent interest with 12 payments is 0.05 / 12 = 0.004.

    4. Use this mortgage formula and plug in the appropriate numbers:

    5. Monthly Payments = L[c(1 + c)^n]/[(1 + c)^n - 1], where L stands for "loan," C stands for "per payment interest," and N is the "payment number."

    6. Monthly Payments = 500,000 [0.004 (1+0.004)^360]/[ (1 + 0.004)^360 - 1]

    7. Monthly Payments = $2684.10

    Источник: https://homeguides.sfgate.com/calculate-monthly-house-payment-30-year-fixed-loan-9679.html

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