How to Calculate a Mortgage Payment
In a hurry:
Apply it today:
Its the amount you agree to pay the lender in exchange for borrowing their money
Based on the loan repayment terms (interest only or amortizing)
By the end of this episode you’ll learn:
What are they?
How do you calculate the payment on an Interest Only loan?
How do you calculate the payment on an Amortizing loan?
Excel’s payment function (=PMT)
How the payment affects the future loan balance
Have a few minutes:
Loans have been around for a looooong time. About as long as when humans with something of value met humans who wanted that item of value. And no loan would be complete without explicit or implied interest.
Enter the mortgage payment. In commercial real estate, repayment structures come in all shapes and sizes but, they are usually categorized in one of two camps: Interest Only loans and Amortizing loans.
This is the first episode of a multi-part series where we examine commercial real estate loan fundamentals, the impact borrowing has investment performance and how you can easily perform these analyses on your own so you can negotiate with your lender more completely.
In this episode, we’ll explore the various aliases of mortgage payments, how to calculate them and how the choice of loan payment structure will affect the loan balance over time.