How to Calculate New Home Mortgage Loan Payments
Most people have to take out a mortgage loan to purchase their home. The loan usually has a long repayment period, typically 15 to 30 years, and can have a fixed or adjustable interest rate. If you have a fixed rate, your mortgage payment will remain the same over the life of the loan. If you have an adjustable rate, you will have to recalculate your mortgage payment every time your mortgage interest rate changes.
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Instructions
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1
Calculate the monthly interest rate of the mortgage by dividing the annual interest rate by 12. For example, if your annual interest rate is 6.48 percent, you would divide 0.0648 by 12 to get 0.0054 as the monthly rate.
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2
Calculate the number of monthly payments you will make by multiplying 12 by the number of years you will take to repay the loan. For example, if your mortgage has a 15-year term, you would multiply 15 by 12 to find there would be 180 monthly payments.
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3
Add 1 to the monthly interest rate. In the example used, you would add 1 to 0.0054 to get 1.0054.
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4
Raise the result from step 3 from the result from step 2. Raising means to multiply the first number by itself the second number of times. In the example, raising 1.0054 to the 180th power means 1.0054 by itself 180 times. Raising 1.0054 to the 180th power equals 2.636322648.
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5
Multiply the result from step 4 by the monthly interest rate. In this example, you would multiply 2.636322648 by 0.0054 to get 0.014236142.
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6
Subtract 1 from the result from step 4. In this example, you would subtract 1 from 2.636322648 to get 1.636322648.
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7
Divide the result from step 5 by the result from step 6. In this example, you would divide 0.014236142 by 1.636322648 to get 0.008700083.
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Multiply the result from step 7 by the amount of the mortgage to calculate the new home mortgage payment. Concluding the example, if you borrowed $190,000, you would multiply $190,000 by 0.008700083 to find the new monthly payment equals $1,653.02.
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Tips & Warnings
You can also use an online calculator (see references) to quickly calculate the loan payment.
References
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