How to Calculate a Mortgage — Complete Guide 2026

What Is a Mortgage?

A mortgage is a loan from a bank or lender used to purchase real estate (house, apartment, land). The lender pays the property price, and you repay in monthly installments over many years.

How to Calculate Monthly Payments

The monthly payment is calculated using this formula:

M = P × [r(1+r)^n] ÷ [(1+r)^n - 1]

Where: M = monthly payment, P = loan amount, r = monthly interest rate, n = number of payments

Practical Example

Property price: $200,000 with $40,000 down payment at 5.5% interest for 25 years:

Loan amount: $160,000
Monthly payment: approximately $982
Total repayment: approximately $294,600
Total interest: approximately $134,600

Important Tips

✅ Compare lenders — interest rates vary significantly
✅ Use our Mortgage Calculator
✅ Make a larger down payment to reduce interest
✅ Ask about fixed vs variable rates

Try the Calculator Now

Use our Mortgage Calculator to find your monthly payments. Also try the Loan Calculator for personal loans.