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Mortgage Form B Street Capital

Mortgage Form B Street Capital

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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 5% fixed annual interest rate with this information what is the monthly mortgage payment how can you calculate it well there's a formula that you could use the monthly payment is going to be the Principal time the annual interest rate / n and all of this is going to be divided by 1 - 1 + r / n raised to the NT so in this problem the principle is basically the balance of the loan which is 400k R so let's write this down so p is 400,000 R is the annual interest rate which is 5% but we need to convert that to a decimal so if you take 5% and then divide it by 100 this is going to be 05 so that's the value that we need to plug in for r n is the number of payme

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