How Do You Calculate Mortgage Payment Information?
Mortgages come into being when a person borrows money and uses a house as collateral. Usually, mortgages are associated with buying a home. When obtaining a mortgage, the borrower should shop for the lowest interest rate. The lower the interest rate, the more the borrower will save over time. It is important to calculate mortgage payments because a borrower needs to know if he or she can afford the monthly payments. Determine the interest rate per month, the number of payments required when making the minimum payment and the principal. For example, if a mortgage requires 12 percent interest, this equals 1 percent interest per month, or 0.01. If the mortgage is due in 20 years, this equals 240 payments, making the loan worth $100,000. Add 1 to the interest rate per month. In this example, 1 + 0.01 equals 1.01. Raise the number calculated in step 2 to the power of the number of required payments. In this example, 1.01 ^ 240 equals 10.89255365. Subtract 1 from the number calculated in ste
