How to Calculate Your Mortgage Payments
Understanding how your monthly house payment is calculated is the first step to financial freedom.
The Mortgage Formula
The standard formula used to calculate a fixed-rate mortgage is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n - 1]
- M: Total monthly payment
- P: Principal loan amount
- i: Monthly interest rate (annual rate divided by 12)
- n: Number of months
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