home | about us | site map | contact us

home mortgages commercial mortgages calculate mortgage payments view current mortgage rates how to use a mortgage learn about mortgages
apply online commercial mortgage refinance commercial purchase mortgages commercial equity loans commercial finance mortgages commercial loan types commercial mortgage rates commercial mortgage calculators mortgage articles commercial mortgage faqs
Articles

home > commercial mortgages > rates > articles > payments > USA mortgage formula

US commercial mortgage loan payment formula

This is the US commercial mortgage payment formula. Use it to calculate what your monthly US commercial mortgage payments will be.

To be perfectly honest with you, this formula is a little bit complicated. And in order to use it you'll need a paper, a pencil and a hand held calculator that has an 'exponent' button on it that usually looks like the following picture:

*

And the hand held calculator you use has to be accurate. To test to see if your calculator is accurate enough, type into it the number "0.05" then divide it by the number "2." If your answer is "0.025" your calculator is accurate enough. But, if your answer is "0.03" your calculator isn't accurate enough (cause it's rounding off numbers too soon).

One more point: you'll be using a lot of decimal numbers (like: 0.0042398729), and you'll need to write down all the numbers after the decimal point on your calculator screen.

Use this US commercial mortgage payment formula, by following eleven steps - starting with step one.

Pssst! You can also use the commercial mortgage payment calculators to calculate your commercial mortgage payments.

US commercial mortgage payment formula: Step one

The first step of using this US commercial mortgage payment formula, is to choose your mortgage principal.

On your piece of paper, write "step one answer = [answer goes here]."

A mortgage principal is the amount of money you want to borrow to get your commercial mortgage. So for example, if you want to borrow $100, 000 for your commercial mortgage, then you would write down: "step one answer = 100000."

Move on to step two.

US commercial mortgage payment formula: Step two

The second step of using this US commercial mortgage payment formula, is to choose your mortgage amortization length. You can choose anywhere from a 5 year mortgage amortization length to a 25 year mortgage amortization length.

Note: If you want to choose an amortization length in half years, you'll need to use the number "0.5." So for example, if you want to choose a 5 1/2 year amortization length, you'll need to use the number "5.5".

On your piece of paper, write "step two answer = [answer goes here]."

Mortgage amortization is the length of time you want to take to completely pay off your commercial mortgage. So for example, if you want to have a commercial mortgage for 25 years, then you would write down: "step two answer = 25."

Move on to step three.

US commercial mortgage payment formula: Step three

The third step of using this US commercial mortgage payment formula, is to choose your mortgage rate.

You have to choose a rate that you predict or hope you'll get for your commercial mortgage. Why? Cause there's never "set" mortgage rates for commercial mortgages: they're always different depending on your particular situation (your property type, how much you borrow etc.)

On your piece of paper, write "step three answer = [answer goes here]."

What's a mortgage rate? It's the percentage of interest you'll be charged on your principal (the amount of money you borrowed) by your lender for borrowing money from them. So for example, if you choose a commercial mortgage rate of 5%, then you would write down: "step three answer = 5."

Move on to step four.

US commercial mortgage payment formula: Step four

The fourth step of using this US commercial mortgage payment formula, is to divide your step three answer by the number "100."

On your piece of paper, write:

step four answer = step three answer / 100
step four answer = [your calculated answer goes here]

So for example, if your answer in step three was "5" then you would write:

step four answer = 5 / 100
step four answer = 0.05

Move on to step five.

US commercial mortgage payment formula: Step five

The fifth step of using this US commercial mortgage payment formula, is to take your answer from step two and times it by the number "12."

On your piece of paper, write:

step five answer = step two answer x 12
step five answer = [your calculated answer goes here]

So for example, if your answer in step two was "5" then you would write:

step five answer = 5 x 12
step five answer = 60

Move on to step six.

US commercial mortgage payment formula: Step six

The sixth step of using this US commercial mortgage payment formula, is to take your answer from step four and divide it by the number "12."

On your piece of paper, write:

step six answer = step four answer / 12
step six answer = [your calculated answer goes here]

So for example, if your answer in step four was "0.05" then you would write:

step six answer = 0.05 / 12
step six answer = 0.004166666666

Move on to step seven.

US commercial mortgage payment formula: Step seven

The seventh step of using this US commercial mortgage payment formula, is to take your answer from step six and add it to the number "1."

On your piece of paper, write:

step seven answer = step six answer + 1
step seven answer = [your calculated answer goes here]

So for example, if your answer in step six was "0.004166666666" then you would write:

step seven answer = 0.004166666666 + 1
step seven answer = 1.004166666666

Move on to step eight.

US commercial mortgage payment formula: Step eight

The eighth step of using this US commercial mortgage payment formula, is to take your answer from step seven and raise it to the exponent of the number you got in step five.

To do this, type your step seven answer into your calculator. Then, press the 'exponent' button on your calculator which usually looks like the following picture:

*

Then, type in the number you got in step five, and press the 'equal' sign (=).

On your piece of paper, write:

step eight answer = step seven answer 'to the exponent' step five answer
step eight answer = [your calculated answer goes here]

So for example, if your answer in step seven was "1.004166666666" and your answer in step five was "60" then you would write:

step eight answer = 1.004166666666 'to the exponent' 60
step eight answer = 1.283358627

Pssst! Notice how many numbers after the decimal have to be used....it's important to write them all down!

Move on to step nine.

US commercial mortgage payment formula: Step nine

The ninth step of using this US commercial mortgage payment formula, is to take your answer from step one, and times it by your answer in step six, and then times that answer by your answer in step eight.

On your piece of paper, write:

step twelve answer = step one answer x step six answer x step eight answer
step nine answer = [your calculated answer goes here]

So for example, if your answer in step one was 100,000, and your answer in step six was 0.004166666666, and your answer in step eight was 1.283358627 then you would write:

step nine answer = 100000 x 0.004166666666 x 1.283358627
step nine answer = 534.7326758

Move on to step ten.

US commercial mortgage payment formula: Step ten

The tenth step of using this US commercial mortgage payment formula, is to take your answer from step eight and subtract the number "1."

On your piece of paper, write:

step ten answer = step eight answer - 1
step ten answer = [your calculated answer goes here]

So for example, if your answer in step eight was 1.283358627then you would write:

step ten answer = 1.283358627 - 1
step ten answer = 0.283358627

Move on to step eleven.

US commercial mortgage payment formula: Step eleven

The eleventh step of using this US commercial mortgage payment formula, is to take your answer from step nine and divide it by your answer from step ten.

The answer to this step will be the amount your monthly commercial mortgage payments could be.

On your piece of paper, write:

step eleven answer = step nine answer / step ten answer
step eleven answer = [your calculated answer goes here]

So for example, if your answer in step nine was 534.7326758 and your answer in step ten was 0.283358627 then you would write:

step eleven answer = 534.7326758 / 0.283358627
step eleven answer = $ 1,887.12 monthly

Get a commercial mortgage today! Fill out the commercial mortgage application.

If you have questions about this US commercial mortgage payment formula, simply contact The Mortgage Store Online's brokers by using the contact form or by calling them at 1-866-674-0548.

<< return to commercial mortgage payments

Commercial mortgage loan articles

apply online | mortgage refinancing | commercial purchase mortgages | equity loans | commercial finance mortgages

commercial loan types | commercial mortgage rates | mortgage calculators | mortgage articles | RSS feed icon commercial mortgage news

home mortgage loans | commercial mortgage loans | calculate mortgage payments | view current mortgage rates

how to use a mortgage | learn about mortgages | privacy policy | disclaimer | RSS feed icon mortgage news & tips

home | contact us | mortgage glossary | about us | site map

The Mortgage Store Online, Inc.
Canadian Head Office: 54 Vansittart Avenue Woodstock, Ontario, Canada N4S 6E4
Home Mortgages: Phone: 1-866-880-2577 Fax: 1-866-270-1984
Commercial Mortgages: Phone: 1-866-674-0548 Fax: 1-866-876-3956

Copyright ©2016 The Mortgage Store Online, Inc. All rights reserved.

 Equal Housing Lender