How the Mortgage Payment is Calculated
The mortgage calculator helps you estimate your monthly payments based on the principal amount, interest rate, and loan term for various states. The interest rates differ per state and are preloaded when you select the state from the dropdown.
The formula used to calculate the monthly payment is as follows:
Monthly Payment = P × [r(1 + r)^n] / [(1 + r)^n − 1]
Where:
- P is the principal loan amount
- r is the monthly interest rate (annual rate divided by 12)
- n is the total number of payments (years × 12)
Example
If you borrow $300,000 for 30 years at an interest rate of 3.5% in California, your monthly payment would be approximately $1,347.13.
Make sure to select the correct state to apply the accurate rate.