The battery you need to work a home mortgage calculator is your brain. A home mortgage calculator is really a formula to help determine how expensive your prospective mortgage is going to be. Brokers and bankers use this to help figure out your mortgage rates. You can check their math by doing it yourself. This is also helpful if you need to compare mortgages offered by differing companies. This can also help you decide how long your mortgage should be, or if you could afford to make two payments a month instead of one.

What You Need To Know

Unfortunately, you can’t just work a home mortgage calculator off the top of your head. You do have to do some research to figure out the numbers needed to work your prospective mortgage payment out. This is going to be done assuming you are willing to pay once a month. I’m also going to assume that you want a fixed rate mortgage, sine that is the safest and most popular kind there is.

You first need to figure out:

How much you still have to pay on the house after the initial down payment (P)
What your interest rate is going to be on what you have to pay (I). This will be given to you usually as a percentage.
How many years, or length, your mortgage is for (L)

Now you need to figure out what your monthly interest is.

Convert I to decimal form with this formula
I / (12 x 100) (for 12 months in a year, remember?)

Once you get that result, figure out how many months you have to make payments to pay the mortgage back with this little formula
L x 12 = N (what you’re looking for)

Now that you’ve done all that, you can determine the monthly payment, but there’s still more you have to do:

Add 1 plus J
Subtract that result from N to the power of N
Subtract I from that result
Divide that result by J
Multiply that result from P

That result is your monthly payment.

To avoid all of this, you can use an online home mortgage calculator. Although most are associated with specific banks and brokerages, with a little research, you can usually find an ad-free one. Some financial and bookkeeping software like Excel or QuickBooks usually have some sort of home mortgage calculator built in.

This works only, of course, once you have a home mortgage rate. Trying to figure out what rate a bank will offer you is a different formula altogether.