Home
Back
Mortgage Payment Formula:
| From: | To: |
The Mortgage Rate Update Calculator helps homeowners recalculate their monthly mortgage payments after an interest rate change. It uses the standard amortization formula to determine the new payment amount based on the remaining principal, new interest rate, and remaining loan term.
The calculator uses the mortgage payment formula:
Where:
Explanation: This formula calculates the fixed monthly payment required to fully amortize a loan over the remaining term at the new interest rate.
Details: Recalculating mortgage payments after rate changes is crucial for budgeting, refinancing decisions, and understanding how interest rate fluctuations affect your monthly financial obligations.
Tips: Enter the remaining principal balance in dollars, the new monthly interest rate as a percentage, and the remaining loan term in months. All values must be positive numbers.
Q1: When should I use this calculator?
A: Use when considering refinancing, when your adjustable-rate mortgage adjusts, or when comparing different loan options.
Q2: How do I convert annual rate to monthly rate?
A: Divide the annual percentage rate by 12 and then by 100 to get the monthly decimal rate. For example, 6% annual = 0.06/12 = 0.005 monthly.
Q3: Does this include taxes and insurance?
A: No, this calculates only the principal and interest portion. Your total payment may include additional amounts for property taxes and insurance.
Q4: What if I have an interest-only mortgage?
A: This calculator is designed for amortizing loans. For interest-only mortgages, the payment calculation is simply principal × monthly rate.
Q5: How accurate is this calculation?
A: This provides the standard mathematical calculation used by most lenders. Actual payments may vary slightly due to rounding methods or specific lender policies.