# Simple Mortgage Calculator

## Introduction

Your monthly mortgage payment is one of the most important considerations when purchasing a home. This amount represents how much you must pay monthly to repay your loan. Though many factors go into calculating this payment, using an online mortgage calculator can give you an estimate of what that payment might be.

## What is a Simple Mortgage Calculator?

A simple mortgage calculator is a useful tool that estimates your monthly mortgage payment based on several key variables, such as loan amount, interest rate, and term. These calculators can be found online and often come at no cost.

## Why use the Simple Mortgage Calculator?

The Simple Mortgage Calculator is a handy tool for quickly calculating monthly mortgage payments for potential home buyers. It is useful for quickly estimating a budget for a potential home purchase, as well as for estimating how much you can afford to borrow for a home or for refinancing an existing mortgage. It is also helpful for understanding how different factors, such as a down payment, loan term, and interest rate, can affect your monthly payments.

## How to Use a Simple Mortgage Calculator?

Utilizing a straightforward mortgage calculator is straightforward. Here are the steps you'll need to take:

Monthly Payment = (Loan Amount * Interest Rate) / (1 - (1 + Interest Rate)^(-Number of Payments))

M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]

Where:
M = Monthly mortgage payment
P = The principal, or the amount of the loan
i = The interest rate, expressed as a monthly decimal
n = The number of months in the loan term

To use this formula, simply input the values for P, i, and n, and then solve for M. For example, if you have a \$200,000 mortgage with an interest rate of 4% and a 30-year loan term, the calculation would look like this:

M = 200,000 [ 0.04(1 + 0.04)^360 ] / [ (1 + 0.04)^360 - 1 ]

M = \$955.33

So, your monthly mortgage payment would be \$955.33.

First, enter the amount you plan to borrow for your mortgage. This is the total amount needed to purchase your home.

Next, you'll need to enter the interest rate you anticipate paying on your mortgage. This will vary based on a variety of factors, such as your credit score and current market conditions.