How to Calculate a Mortgage Payment
Calculating a mortgage payment isn't as simple as it sounds. The complexities of compound interest make it challenging computation to perform. However, most financial calculators will be able to handle the computation.
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Instructions
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1
Set the financial calculator to 12 payments per month.
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2
Input the mortgage balance that the payment is calculated from as the present value. Usually this is the original balance of the mortgage. This value should be input as a negative number.
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3
Input the interest rate. Note this needs to be the actual interest rate and not the APR.
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4
Input the future value as zero.
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5
Input the number of payments. Be sure to correct enter 360 payments for a 30-year mortgage and not the number of years (30).
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6
Press the payment key (usually PMT). This will give you the payment value. Keep in mind that this represents principal and interest only.
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