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How to Calculate Mortgage Payments

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Some people want to know how to calculate mortgage payments. You don’t really need to do the work, but if you’re curious you can certainly do so. To calculate mortgage payments, you need to know a few details about the loan. Let’s go through the steps and tools you can use to calculate mortgage payments.

Why Calculate Mortgage Payments?

By going through the process, you get an idea of how much you pay in principal and interest each month. Calculating mortgage payments lets you look under the hood and see how your loan really works.

When you calculate mortgage payments, you’ll see how your loan amortizes. Amortization is the process of paying down a loan. Learn more:

It’s easiest to calculate mortgage payments on traditional fixed rate mortgages. If you have an exotic loan, the process is much more difficult.

Calculate Mortgage Payments Online

The easiest way to get the details is to use a calculator. There are plenty of websites that calculate your mortgage payments for you:

Use a Spreadsheet to Calculate Mortgage Payments

If you really want to analyze the nuts and bolts of a loan, you can use a spreadsheet such as Microsoft Excel. If you’re an Excel whiz, you can set up a spreadsheet that allows you to change the inputs and calculate mortgage payments under several "what-if" scenarios.

Calculate Mortgage Payments Manually

If you are good with numbers and just want to do it the old fashioned way, you can do so. I’d suggest skipping this method and using a calculator or computer, but if you love to crunch numbers you can find the formulas below:

Other Important Numbers

After you calculate mortgage payments, you should understand some other important numbers. These numbers affect whether or not you’ll get a loan, and how good the terms will be. Lenders may have minimum requirements for you to qualify for a mortgage.

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