How to calculate the mortgage rate?

1. Gather Information:
   • Loan Amount: This is the total amount you’ll be borrowing.
   • Interest Rate: The annual interest rate charged on the loan.
   • Loan Term: The number of years you’ll be repaying the loan.
2. Understand the Formula:
   • The formula for calculating the monthly mortgage payment is: 𝑀=𝑃×𝑟(1+𝑟)𝑛(1+𝑟)𝑛−1M=P×(1+r)n−1r(1+r)n​ Where:
     • $M$ = Monthly Payment
     • $P$ = Loan Amount
     • $r$ = Monthly Interest Rate (Annual Interest Rate ÷ 12)
     • $n$ = Number of Payments (Loan Term × 12)
3. Example Calculation:
   • Loan Amount: $200,000
   • Interest Rate: 4% per annum
   • Loan Term: 30 years
   • Monthly Interest Rate ($r$): $4\%÷12=0.003333$ (Convert annual interest rate to monthly)
   • Number of Payments ($n$): $30\times 12=360$ (30 years converted to months)
   • Plug these values into the formula and calculate: 𝑀=200,000×0.003333(1+0.003333)360(1+0.003333)360−1M=200,000×(1+0.003333)360−10.003333(1+0.003333)360​
4. Solve the Equation:
   • Calculate the value inside the brackets first, then use the rest of the formula to find the monthly payment.
5. Interpret Results:
   • In this example, the monthly payment would be approximately $954.83.