What is Mortgage?
A mortgage is a loan from a bank, lender or similar to help you finance the purchase of a home or house. When you take a mortgage, you make a promise to repay the money to the bank or lender you’ve borrowed, plus an agreed-upon interest rate. The home is used as “collateral.” in such cases
How do you calculate the monthly payments for a mortgage?
The equation for mortgage payments
M = the total monthly mortgage payment.
P = the principal loan amount.
r = your monthly interest rate.
n = number of payments over the loan’s lifetime.
How do you calculate principal and interest on a mortgage?
Divide your interest rate by the number of payments you’ll make in the year (interest rates are expressed annually). So, for example, if you’re making monthly payments, divide by 12. 2. Multiply it by the balance of your loan, which for the first payment, will be your whole principal amount.