How to Calculate Mortgage Percentage Rates Payments
Mortgage payments can be calculated for any type of rate that is applied to the mortgage loan. Most all types of mortgage loans have a percentage rate that is compounded annually. This means that you will need to determine how much you will pay each month for the amount of the mortgage. You can calculate the mortgage percentage rate payments using an online calculator, or you can calculate the payment manually.
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Instructions
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Online Calculator
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1
Go to an online calculator, such as the one provided by Bankrate (see Resources).
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2
Enter the amount for the mortgage in the "Mortgage amount" field.
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3
Enter the term for the mortgage, such as 15 or 30 years, into the "Mortgage term" field.
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4
Enter the interest rate for the mortgage in the "Interest rate" field.
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5
Select the beginning date of the mortgage by choosing the Month, Day and Year from the drop-down selections for the mortgage start date.
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6
Click the "Calculate" button to see the monthly payment for your mortgage.
Manual Calculation
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Make a note of the amount, the interest rate and the length of the mortgage. This can be a mortgage amount of $100,000 with an interest rate of 5 percent and a length of 15 years as an example.
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8
Write out the formula that you will need to use to calculate the monthly payment. This formula is expressed as M = P[i(1 + i)n] / [1 = i)n -- 1]
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9
Calculate (i) by dividing the interest rate, such as 5 percent by 12 (i = .05 / 12) or .004167. Calculate the monthly payments by multiplying 12 times the years, such as 15 (12 x 15) or 180.
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Calculate (1 + i)n by using the x/y key on your calculator. The result will equal 2.11383 in this example.
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Complete the formula using the results from steps 3 and 4 using P as the total of the mortgage, which is $100,00 in this example. M = P [i(2.11383)] / [2.11383 - 1] or M = $100,000 x 0.00790 = $790.81.
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References
Resources
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