Formula and example to calculate a mortgage

This mortgage calculator allows you to estimate the monthly payment you will have to pay based on the loan amount, the annual interest rate and the loan term in years. The calculations are based on the standard amortization formula, which takes into account compound interest.

Calculations:

• Loan Amount (€): The total amount in euros that is requested as a mortgage loan.
• Annual Interest Rate (%): The annual interest rate of the loan in percentage. It becomes a monthly rate by dividing it by 12.
• Loan Term (years): The number of years over which the loan will be repaid. It is converted to months by multiplying the term by 12.
• Formula: M = P × [r(1 + r)^n] / [(1 + r)^n – 1]
• Where:
  • Mis the monthly payment to be paid.
  • Pis the amount of the loan.
  • ris the monthly interest rate.
  • nis the total number of payments (months).