Home
Back
Mortgage Payment Formula:
| From: | To: |
The mortgage payment formula calculates the fixed monthly payment required to fully amortize a loan over its term. The formula accounts for the principal amount, interest rate, and loan duration.
The calculator uses the standard mortgage formula:
Where:
For extra payments: The calculator applies your additional payment directly to the principal each month, recalculating the amortization schedule to show how much time and interest you'll save.
Details: Even small extra payments can significantly reduce your total interest and shorten your loan term. This calculator shows the powerful impact of paying more than your minimum payment.
Tips: Enter your loan amount, interest rate, and term. Optionally add any extra monthly payment you plan to make. All values must be positive numbers.
Q1: How much can I save with extra payments?
A: Even $50-100 extra per month can save thousands in interest and cut years off your mortgage. This calculator shows exactly how much.
Q2: Should I pay extra each month or make lump sum payments?
A: Regular extra payments have a greater impact because they reduce principal earlier, but any extra helps. This calculator assumes regular monthly extra payments.
Q3: Does this account for changing interest rates?
A: No, this calculator assumes a fixed-rate mortgage. For adjustable-rate mortgages, results would vary as rates change.
Q4: Are there prepayment penalties?
A: Most modern mortgages don't have prepayment penalties, but check your loan terms. This calculator doesn't account for penalties.
Q5: How accurate are these calculations?
A: Very accurate for fixed-rate loans. Actual results may vary slightly due to rounding or if payments are applied at different times in the billing cycle.