## Table of Contents

- Formula to Calculate Mortgage Payments
- Calculating Monthly Payments
- Calculating Without a Calculator
- Mortgage Payment Example

## Introduction

Mortgage payments are one of the biggest expenses for many people, and understanding how your mortgage works and how much your payments could be can help you budget more effectively. Learning how to calculate your mortgage payments and figure out how much you’ll be paying each month can help you plan for the future and ensure that you’re making the right decision when it comes to your home. This guide will explain the basics of how to calculate your mortgage payments and provide some helpful tips.

## Formula to Calculate Mortgage Payments

The formula for calculating mortgage payments is:

M = P[r(1+r)^n]/[(1+r)^n-1]

Where:

- M = Monthly Payment
- P = Principal (the amount of the loan)
- r = Monthly interest rate (the interest rate divided by 12)
- n = Number of payments (number of months over which the loan will be paid)

## Calculating Monthly Payments

To calculate your monthly payment using the formula above, you’ll need to know the following:

- The principal amount of your loan
- The interest rate of your loan
- The length of your loan (in months)

Once you have this information, you can plug it into the formula and calculate your monthly payment. For example, if you have a loan of $250,000 with an interest rate of 5% and you plan to pay it off over 30 years (360 months), the formula for calculating your monthly payment would be:

M = 250000[0.004167(1+0.004167)^360]/[(1+0.004167)^360-1]

This would give you a payment of $1,359.03 per month.

## Calculating Without a Calculator

If you don’t have access to a calculator but want to figure out your monthly payments, you can do so without one. There are a few methods you can use to calculate your payment without a calculator:

- Adjustable Rate Mortgage (ARM) Calculator: This calculator can be used to estimate your monthly payments for an adjustable rate mortgage (ARM) loan. This type of loan is often used for short-term financing and can have an adjustable interest rate.
- Fixed Rate Mortgage (FRM) Calculator: This calculator can be used to estimate your monthly payments for a fixed rate mortgage (FRM) loan. This type of loan has a fixed interest rate and is often used for longer-term financing.
- Amortization Table: An amortization table is a table that shows you how the principal and interest of a loan are paid down over time. It can be used to calculate your monthly payments and you can find one online or in a book.

Using any of these methods, you can figure out your monthly payments without a calculator.

## Mortgage Payment Example

To give you an example of how to calculate your monthly payments, let’s say you have a loan of $350,000 with a 5% interest rate and you plan to pay it off over 30 years. Using the formula above, we can calculate that your monthly payment would be:

M = 350000[0