How to Calculate Your Mortgage Amount Based on Monthly Payments

You must pay back principal and interest on a mortgage.

If you know your monthly mortgage payment, the number of required payments and the interest rate on the mortgage, then you can calculate the original amount of the mortgage. The original amount of the mortgage is the total amount of principal you must pay back. In addition to the original principal, you will also have to pay interest on the amount you borrowed. This calculation is good to know if information on the original loan is lost.

Instructions

1. Determine the monthly mortgage payment, the number of required payments and the interest rate on the mortgage. For example, an individual pays $600 a month on his mortgage, and he must make a total of 360 payments. The interest rate on the mortgage is 8 percent per year.

2. Calculate the interest rate per month by dividing the interest rate per year by 12. In our example, 8 percent divided by 12 equals 0.00667.

3. Add 1 to the interest rate per month. In our example, 1 plus 0.00667 equals 1.00667.

4. Raise the number calculated in Step 3 to the power of the negative number of payments required. In our example, 1.00667 raised to the power of -360 equals 0.091334432.

5. Subtract the number calculated in Step 4 from 1. In our example, 1 minus 0.091334432 equals 0.908665568.

6. Divide the payment per month by the interest rate per month. In our example, $600 divided by 0.00667 equals $89,955.02.

7. Multiply the number calculated in Step 6 by the number calculated in Step 5 to determine the original loan amount. In our example, $89,955.02 times 0.908665568 equals $81,739.03.

References

• Oak Road Systems: Loan or Investment Formulas