Silverton Mortgage Calculator

July 1, 2024 by Ninja

 

 

 

 

About Silverton Mortgage Calculator (Formula)

The Silverton Mortgage Calculator computes the monthly payment for a mortgage based on the principal amount, annual interest rate, and loan term using the following formula:

M=P×r×(1+r)n(1+r)n−1M = P \times \frac{r \times (1 + r)^n}{(1 + r)^n – 1}M=P×(1+r)n−1r×(1+r)n​

Formula Breakdown

• M: Monthly payment (principal and interest).
• P: Principal amount (initial loan balance).
• r: Monthly interest rate, calculated as Annual Interest Rate12\frac{\text{Annual Interest Rate}}{12}12Annual Interest Rate​.
• n: Total number of monthly payments, calculated as $\text{Loan Term}\times 12$.

Example Calculation

Suppose you have the following inputs:

• Principal Amount: $200,000
• Annual Interest Rate: 4.5%
• Loan Term: 30 years

First, convert the annual interest rate to a monthly rate: r=4.5%12=0.375%=0.00375r = \frac{4.5\%}{12} = 0.375\% = 0.00375r=124.5%​=0.375%=0.00375

Calculate the total number of monthly payments: $n=30\times 12=360$

Now, plug these values into the formula: M=200,000×0.00375×(1+0.00375)360(1+0.00375)360−1M = 200,000 \times \frac{0.00375 \times (1 + 0.00375)^{360}}{(1 + 0.00375)^{360} – 1}M=200,000×(1+0.00375)360−10.00375×(1+0.00375)360​

After calculation, the monthly payment (M) would be determined, providing clarity on the financial commitment associated with the mortgage.

Understanding the Silverton Mortgage Calculator formula empowers users to estimate and plan for monthly mortgage payments based on their financial parameters.