How to Calculate Mortgage Payment Without a Calculator

Learning to calculate a mortgage payment can be a useful way to get a more thorough understanding of your loan. It will show you how much you'll be paying in principal and interest. Without a calculator, calculating this payment is slightly involved, but not terribly so.

Things You'll Need

• Mortgage statement Loan agreement

Instructions

1. Collect your mortgage loan agreement and your loan statement. You'll need your interest rate, the term of the loan (length in years) and the original mortgage loan amount (assuming this is a conventional mortgage). Assign letters to represent each of these figures. For this example, use P for principal (loan amount), I for interest, L for length, M for payment, J for monthly interest (decimal form, J = I / (12 * 100) and N for number of months (L*12). Also, for this example, let's use 200,000 at 5 percent interest on a 30-year term.

2. Use the following equation with the assigned variables: M = P * (J / (1 - (1 + J) ** -N)). The symbols in this equation are as follows: * stands for multiplication; / stands for division; ** stands for exponent. So, in the example, the equation looks like this: M = 200,000 * (.0042 / (1 - (1 + .0042) ** -360)).

3. Calculate for payment. Perform this operation first: (1 + .0042) = 1.0042 Next, take this number to the negative 360 power. This number is 0.2212. Next, subtract this number from the number 1. That leaves: 0.7788. Now, divide by J, or .0042 to get .00539.

4. The last calculation is to multiply this number (.00539--the end result of all the calculations within the parenthesis) by the loan amount, P, or 200,000. That calculation will give you your monthly payment. This number is 1078.00. 1078.00 is your standard monthly payment (again, assuming you have a conventional mortgage) without any PMI, taxes or homeowners insurance.