![]() ![]() The loan amount is -$300,000 (note the negative sign).The interest rate is 4.5% per year divided by 12 (for 12 months) = 0.375% per month.The PMT function computes the monthly payment required to pay off a loan based on a constant interest rate, constant monthly payments, and a constant loan amount. Loan Amount is the total amount of the loan.įor example, let’s say you have a 30-year, $300,000 mortgage with a 4.5% interest rate.Term is the number of years the loan is for.The PMT function is the core function used to calculate mortgage payment in Excel. Using Excel Functions to Calculate Mortgage Payment The PMT Function The principal is the amount borrowed to purchase the property, interest is the cost of borrowing the money, taxes are the property taxes that are based on home value, and insurance includes homeowner’s insurance and mortgage insurance. A mortgage payment is typically composed of four parts: principal, interest, taxes, and insurance (PITI). Understanding Mortgage Payment Calculationīefore we dive into the process of calculating mortgage payments in Excel, it’s important to understand the components that are used to compute the payment. ![]() Can I Share My Excel Mortgage Calculator With Others?. ![]()
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