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Your Mortgage Guide the Process, Meet Your  Form

Your Mortgage Guide the Process, Meet Your Form

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in this lesson we're going to talk about how to calculate your monthly mortgage payment so let's say if you take out a mortgage to buy a home let's say the face value of the loan is 400k and let's say this is a 30-year loan and the interest rate we'll say it's a a five percent fixed annual interest rate with this information what is the monthly mortgage payment how can you calculate well there's a formula that you could use the monthly payment is going to be the Principal times the annual interest rate divided by n and all of this is going to be divided by 1 minus 1 plus r over n raised to the negative NT so in this problem the principal is basically the balance of the loan which is 400k r so let's write this down so p is four hundred thousand R is the annual interest rate which is five percent but we need to convert that to a decimal so if you take five percent and then divide it by a hundred this is going to be 0.05 . so that's the value that we need to plug in for r n is the number

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