At
Sky Home Loans we give it
to you simple and straight. Everything you
need to know about home
loans with the best mortgage and home loan
rates. Consolidating mortgages or home loans
is vital if done right. We have the best
home mortgage loan consolidation programs
and please use our home mortgage payment calculator
to find out what sort of home loan you can
afford over any mortgage repayment period.
At Sky Home Loans we have the best mortgage
and home loan consolidators giving advice
so you can be sure that the whether you are
looking for a home consolidation
loan or simple mortgage, we have the
right mortgage advice at the
Mortgage payment calculator center
a division of Sky Loans.
|
Find Info on any type of home
loan below:-
Mortgage
Payments Calculator
(How your mortgage payments are calculated)
Calculating your mortgage payment involves some
relatively tricky math to end up with some relatively
neat equations. From basic principles you need to
targe a stream of monthly payments that when present
valued will equal the mortgage principle amount taken
out today.
If you are planning on setting up a spreadsheet
to calculate mortgage payments see our 'mortgage
amortization schedule' which will show you more spreadsheet
calculations you can use.
The following is a step by step guide that will
show you how mortgage lending companies calculate
your mortgage payment. First, we need some definitions:
PF = payment frequency, the number of payments per
year. Use 12 for monthly.
I = interest rate
i = effective interest rate (we're going to calculate
this)
n = period (the number of payments – the term
or number of years in the mortgage times the number
of payments per year.)
For the first step, calculate i. You can think of
this as the effective interest rate per month:
i = (1 + I/PF)^(12/PF) - 1
Next, calculate n (this is the number of payments
in your mortgage):
n= PF X term of mortgage
Now we need to calculate an annuity factor.
Annuity factor = {1 – [1/(1+i)]^n}/i
And finally,
Payment = Principal/Annuity factor
Lets do a quick example:
$100,000 mortgage at 7% interest. We'll assume a
30 year mortgage, with monthly payments.
i = (1+.07/12)^(12/12) - 1
= (1+1.00583333333)^1 - 1
= 1.00583333333 – 1
= .0058333333
Next, calculate n:
n= 12 X 30 (12 monthly payments, times 30 years)
= 360
Annuity factor
= {1 – (1/(1+i))^360}/.00583333333
= {1 – (1/1.0058333333)^360}/.0058333333
= {1-.994200497^360}/.0058333333
= {1-.123205853}/.005833333
= .876794147/.0058333333
= 150.3075
Payment = 100000/150.3075
= $665.30
Therefore your monthly mortgage payment would be
$665.30. You can repeat this calculation for any
interest rate, term, or mortgage amount.
There are certainly numerous online calculators
including our Online Mortgage Calculator. If you
prefer to calculate offline, use of a spreadsheet
is warranted. You should be able to duplicate the
above calculations, Simply set up cells that act
as inputs for the interest rate, term of the mortgage,
and the mortgage principle and the above calculations
will allow you to calculate payments quickly.
Useful home loan
links |
