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When it comes to calculating mortgage payments, most people seem to dread by just the thought of it. Truth be told, it’s not really the most exciting task to do, yet, one way or another you’ve got to do it. Hopefully, with following these simple steps on this guide, you will have a better time when you calculate monthly mortgage payment.

1. Foremost, you need to have three pieces of data, an advanced or scientific calculator, or spreadsheet software. The data you’ll need would be taken from an estimated monthly mortgage payment that will help you in determining the type of home you would be able to buy, based on latest mortgage interest rates. However, this calculation does not include other expenses such as taxes and insurances for the home.
2. After collecting the three pieces of information- principal, interest rate, and the number of loan years, get the annual interest rate and divide it by 12 to determine the monthly interest rate. For instance, if the annual interest rate 5% or .05, divided by 12, you would have .004166 as the monthly interest rate, you can note this as i, i=.004166.
3. Next, compute the total number of payments required for the rest of the loan period by multiplying it with the number of years by 12. For a 25 year mortgage, the total would be 300 (15*12=300). Note this value as n, n=300.
4. Another thing to do after having the “i” and the “n” is identifying the denominator that should be used to multiply against the principal. Use this formula: [(1+i)^360]-1. From the example, this would be [(1+.004166)^360]-1=3.4667.
5. After having the value for the denominator, determining the numerator should follow. To do this, use this formula: [(1+i)^360]*i. This would be [(1+.004166)^360]*.004166=.018608.
6. Next thing to do is divide the numerator by the denominator and multiply it with the principal loan amount (for this will try to use $300,000 as the amount). That would be, (.018608/3.4667)*$300,000=1610.31. Hence, the monthly mortgage payment would be for this example, $1,610.31.

That’s how easy it is to calculate monthly mortgage payment for your home!