Tip The monthly mortgage payment formula includes the amount of money that you are borrowing, your assigned interest rate, and the length of time that you have to repay your mortgage. If you know the principal, interest rate, and the length of the terms, you can calculate both its monthly payments and total cost of borrowing. Zillows Home Loan Calculator takes an annual percentage of the loan, divided by 12, and recalculates the monthly mortgage payments.

A fixed-rate mortgage will have the same total principal and interest each month, but the effective numbers change on each one as the loan is paid down. A 15-year fixed-rate mortgage has higher monthly payments (because you are paying the loan off in 15 years, rather than 30), but over the life of the loan, you could save thousands on interest. A 30-year fixed-rate mortgage has lower monthly payments, though you will pay more interest over the course of the loan.

A 15-year mortgage, by contrast, is likely to have a lower interest rate, but the payments are significantly higher, since you are paying the loan back in half as long. Your interest rate is typically higher since longer loans are more risky to lenders, but your monthly payments are lower than a 15-year mortgage due to the fact that you have 15 more years to pay the loan off. For standard 30-year mortgages or 15-year mortgages, use the formula below to calculate your payments.

You can determine your total number of payments by multiplying your mortgages years of service by the number of months in the year. The main variables in the calculation of your mortgage include your loan principal, your balance, the periodic compound interest rate, your payments each year, your total payments, and the regular amount of payments. Based on estimates, the mortgage calculator from Forbes Advisors also calculates what percentage of each monthly payment goes to interest, and what percentage goes to pay down loan principal. To figure out the total amount of interest you will pay over the life of your mortgage, multiply the amount of each monthly payment by the total amount of monthly payments you plan to make.

If you would like a complete estimate of the value of your mortgage, you will have to figure out your mortgages overall value, which is shown below. Once you calculate your mortgages total principal and interest costs, it is easy to factor in closing costs or fees. Note that this formula gives you the monthly principle and interest cost alone, so you will have to add in other expenses such as taxes and insurance later.

Remember, your monthly house payment includes more than simply paying back what you borrowed to buy your house. You may be making payments toward the principal in an interest-only term, but it is not required. Extra payments applied directly to principal at the beginning of the loans life may allow for several years less repayment over a 30-year term. If the homebuyer chooses to take out a 30-year loan, the majority of his or her initial payments will be applied toward the interest payments of the loan.

Unfortunately, you will not be paying off your loan at every required payment, but typically, if you are looking to get out from under the debt, there are additional payments that you can make every month. If you do not have enough saved up to make the 20% down payment, you will be paying more each month to afford the loan. A 20% down payment also allows you to avoid paying private mortgage insurance on the loan.

After a set amount of years, you are required to begin making payments on an amortized basis in order to repay your debt. An amortization plan includes the principal amount, which is the amount going toward paying down the loan, and interest, which goes to the bank. The ratio of how much of your payments goes to interest and the principal changes every month because of the amortization.

This will give you the lifetime value of your monthly payments, which does not include any costs for the mortgage. These are fixed costs not determined by how much you borrowed from the bank, so it is easy to tack them onto the monthly costs. Lenders will take a cut from your monthly mortgage payment into an escrow account, usually every month, so that they will make sure that you are not falling behind on annual taxes and insurance payments. This means that the bills you get each month for your mortgage not only cover principal and interest payments — the money going straight into your loan — but property taxes, homeowners insurance, and, in some cases, private mortgage insurance.

The fixed monthly payment of a fixed-rate mortgage is the amount borrowers pay each month, which guarantees the loan will be paid back in full, interest-free, at the end of the terms. Mortgage Calculator Home Loan Balance Annual Interest Rate Loan Term Years Calculated Results Monthly Payment Total Interest Paid Total Cost of Loan The home loan balance at the average interest rate paid over the years of its term would result in monthly payments of. If you would like to calculate the monthly mortgage payment manually, you will need a monthly interest rate: simply divide your yearly interest rate by 12 (the number of months in the year). If your annual rate is 4.5%, then you will divide.0045/12 to give you a monthly interest rate of.00375. N = The total amount of payments that you will make during the life of the mortgage.

You could expect to pay a total of $368,510.40 over 30 years to repay the entire mortgage, assuming that you make no additional payments and no sale prior to then.

When determining whether to approve you for a particular mortgage amount, lenders look closely at your debt-to-income (DTI) ratio, which is the comparison between your total monthly debt payments and your monthly pre-tax income.