Simple Mortgage Calculator
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]
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.
Enter Your Loan Amount
First, enter the amount you plan to borrow for your mortgage. This is the total amount needed to purchase your home.
Enter Your Interest Rate.
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.
Enter your loan term.
Your loan term is the length of time you'll be repaying your mortgage loan, typically expressed in years. Popular loan terms are 30 and 15 years.
Calculate Your Monthly Mortgage Payment.
Once all required information has been entered, the mortgage calculator will produce an estimate for your monthly payment. This amount includes both principal and interest, as well as any taxes or insurance needed to be paid.
Examples of Simple Mortgage Calculators
On the internet, there are various types of simple mortgage calculators. Here are a few examples:
Bankrate Mortgage Calculator: This tool allows you to enter your loan amount, interest rate, loan term, and other factors to estimate your monthly mortgage payment.
Zillow Mortgage Calculator: This tool gives an estimated monthly mortgage payment based on your loan amount, interest rate, and term.
NerdWallet Mortgage Calculator: This tool allows you to customize your inputs for an even more precise estimation of your monthly mortgage payment.
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