The mortgage rate calculator helps you determine the monthly payment and total interest paid on a mortgage based on the loan amount, interest rate, and term of the loan.
To calculate the monthly mortgage payment, use the formula:
\[ MP = P \left[\frac{r(1+r)^n}{(1+r)^n-1}\right] \]
Where:
Imagine you are planning to take a mortgage of $200,000 with an annual interest rate of 4% and a term of 30 years. Here's how you can calculate the monthly payment:
First, calculate the monthly interest rate:
\[ r = \frac{4}{100 \times 12} = 0.0033333 \]
Next, calculate the number of payments:
\[ n = 30 \times 12 = 360 \]
Then, calculate the monthly payment:
\[ MP = 200,000 \left[\frac{0.0033333(1+0.0033333)^{360}}{(1+0.0033333)^{360}-1}\right] \]
This gives you a monthly payment of approximately $954.83.
