Certain formulas take the pain away in the computation of interest rates on mortgaged properties. Where before, compound interest tables were used to compute for monthly dues, now online mortgage calculators do the job, faster. A mortgage calculator will answer questions regarding the impact of changes in the mortgage variables. Mortgage calculators are available on line for free. As long as you know the interest rates and the amount of the loan, you can play around with the figures to come up with terms that are comfortable for you.

Different formulas will address different questions.

The following formula is used to calculate the fixed monthly payment (P) required to fully amortize a loan of L dollars over a term of n months at a monthly interest rate of c. [If the quoted rate is 6%, for example, c is .06/12 or .005].

P = L[c(1 + c)n]/[(1 + c)n - 1]

The next formula is used to calculate the remaining loan balance (B) of a fixed payment loan after p months.

B = L[(1 + c)n - (1 + c)p]/[(1 + c)n - 1]

Online mortgage calculators will also allow you to compute for annual percentage rates and future values

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