Most people have to borrow money to buy their houses. A mortgage with a fixed interest rate blocks the interest rate during the life of the mortgage. To calculate the amount of your payments, you will need to know the interest rate, the loan time and the amount you have requested.

Instructions

1. Determine the amount you need to borrow for your mortgage.
2. Determine the time of your loan. Most mortgages are from 15 to 30 years. The longer you spend on paying the loan, the lower your monthly payments, but you will pay more interest over the life of the loan.
3. Determine the interest rate you will pay. If you have been approved for a mortgage, the lender will set the rate based on your creditworthiness, your income and many other factors. Lenders typically offer lower rates for short term loans and for people with good credit. If you are making a comparison of mortgages, lenders make their rates and their time frames readily available.
4. Determine the periodic interest rate by dividing the annual interest by 12. For example, if the annual interest rate is 7.5%, the periodic interest rate will be 0.625%.
5. Point out the number of payments you will make during the life of the mortgage by multiplying the number of years by 12. For example, if you have a mortgage for 30 years, you will make 360 ​​payments.
6. Add one to the periodic interest rate. For example, if the periodic interest rate is 0.625%, or 0.00625, you will get 1.00625.
7. It raises the value of step six to the negative power N, where N is the number of payments to be made during the life of the mortgage, found in step 5. For example, if the number in step 6 were 1.00625 and do 360 payments, you would compute 1.00625 ^ -360 and you would get 0.106139829.
8. Subtract the value from step 7 of 1. For example, if your value is 0.106139829, you will get 0.893860171.
9. Divide the periodic interest rate between the numbers obtained in step 8. For example, if the periodic interest rate is 0.00625 and the number in step 8 is 0.893860171, you will get 0.006992145.
10. Multiply the result in step 9 by the amount you borrowed to calculate your monthly payment. For example, if you borrowed $ 300,000 you would multiply $ 300,000 by $ 0.006992145 to get $ 2,097.64 as your monthly payment.

Tips & Warnings

• You can also calculate your monthly mortgage payment using the following formula where P is the loan capital, I is the periodic interest rate, N is the number of payments you will make on the loan.
• Monthly payment = P (I / (1 – (1 + I) ^ – N))
• For example, if you have a 30-year mortgage at 7.5% for $ 300,000, your monthly payment will be $ 2,097.64.
• Most lenders prefer that your monthly payment does not exceed 28% of your monthly income.
• Lenders also take into account other debt obligations you have such as student loans or a car loan. Your total debt payments typically cannot exceed 36% of your income.
• You must take into account your closing costs, the amount you will need for your home repairs, and the amounts needed to place them in a homeowner’s and real estate tax deposit when you determine the amount you need to order borrowed. Your security deposit, and sometimes your closing costs, can be attributed within your total monthly amount and interest payment.