How to Do the Math to Calculate House Payments
After a bank approves you for a mortgage loan, it's a good idea to calculate your house payment so you know exactly how much you owe each month toward your principal balance. Interest rates can add up quickly, so you'll want to know how much money is being paid to your principal balance and how much is applied toward interest. To calculate your monthly house payment, you will need a few simple resources, including your mortgage loan documents and a calculator or paper and pen.
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Instructions
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Determine how much interest you owe on your mortgage. For a principal amount of $150,000 with a 5 percent interest rate, you would multiply 150,000 by .05. Your yearly interest payment is $7,500.
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Calculate your monthly interest payment. Divide 7,500 by 12 for a monthly interest amount of $625.
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Divide your loan amount by the term of the loan. For a 30-year term, divide 150,000 by 360. There are 12 months in a year and 12 multiplied by 30 (term of the loan) equals 360. Your monthly principal amount is $416.66.
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Add the principal amount and interest amount to get your monthly house payment. For a $150,000 loan over a 30-year period with a 5 percent interest rate, your monthly house payment would be $1,041.66 ($625 plus $416.66).
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Tips & Warnings
House payment calculators are available online.
Always check the term of your loan to be sure your calculation is correct.
