Cory Thompson

Mid America Mortgage, Inc.

  • Home
  • About
    • About Cory
    • Accessibility Statement
    • Texas Recovery Fund Notice
  • Blog
  • Mortgage Info
    • First Time Seller Tips
    • First Time Buyer Tips
    • Loan Programs
    • Home Appraisal
    • Loan Checklist
    • Loan Process
    • Mortgage FAQ
    • Mortgage Glossary
    • What to Expect at a Loan Closing: A Step-by-Step Guide
  • Zillow Reviews
  • Pre-Qualify
  • Contact

Cory Thompson March 5, 2025

Understanding Mortgage Payments and How to Calculate Them

Knowing how to calculate mortgage payments can help you plan for homeownership and budget effectively. Several factors determine your monthly payment, including the loan amount, interest rate, and loan term. Here’s a step-by-step guide to understanding the process.

Key Factors in Mortgage Payment Calculation

Loan Amount – This is the total amount borrowed after the down payment. For example, if you’re purchasing a $300,000 home with a 20 percent down payment ($60,000), your loan amount would be $240,000.

Interest Rate – The cost of borrowing, expressed as a percentage. For example, a 4 percent annual interest rate means you’ll pay 4 percent of the remaining loan balance each year.

Loan Term – The length of time you will repay the loan. A 30-year mortgage means 360 monthly payments (30 years x 12 months).

Mortgage Payment Formula

The standard formula for calculating a fixed-rate mortgage payment is:

M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]

Where:

M = Monthly mortgage payment

P = Loan amount

i = Monthly interest rate (annual rate divided by 12)

n = Loan term in months

By substituting your specific loan details into this formula, you can determine your monthly payment.

Using a Mortgage Calculator

If you prefer a simpler approach, online mortgage calculators can quickly estimate your monthly payment. These tools allow you to adjust variables like the interest rate, down payment, and loan term to see how they affect your payments.

To use a mortgage calculator effectively:

•             Enter your loan amount, interest rate, and loan term.

•             Adjust inputs to compare different scenarios, such as increasing your down payment or choosing a shorter loan term.

•             Ensure the estimated payment fits within your budget.

Once you have a payment estimate, consult a mortgage professional to explore your options. They can provide details on loan programs, closing costs, and pre-approval to help you move forward with confidence.

Filed Under: Mortagage Tips Tagged With: Home Buying, Mortgage Payments, Mortgage Tips

Cory Thompson

Cory Thompson


Mortgage Loan Originator
Mobile 832.347.1855
Office 281.218.0505

NMLS ID 225056

Legend Lending

Connect with Me

Let’s Keep In Touch!

  • This field is for validation purposes and should be left unchanged.

Recent Posts

  • Sweet Loans for Every Taste: Which Mortgage Treat Is Right for You?
  • Is Owner Financing Your Home the Smartest Move?
  • What’s Ahead For Mortgage Rates This Week – May 27th, 2025
  • Honoring Our Heroes and Celebrating the Meaning of Home

Equal Housing Lender

© 2024 Legend Lending Corporation NMLS 229421 | Texas Recovery Fund Notice  | NMLS Consumer Access | Privacy Notice | Legal | Licensing

Our Location


Legend Lending
17047 El Camino Real Ste 150
Houston, TX 77058

Return to top of page

Copyright © 2025 Cory Thompson. All rights reserved.   Log In