A mortgage calculator is an essential tool for anyone looking to buy a home or refinance a loan. With Google Sheets, you can create a custom mortgage calculator that will help you estimate monthly payments based on key variables such as loan amount, interest rate, and loan term.
Follow these simple steps to create your own Google Sheets Mortgage Calculator. It will allow you to input loan details and calculate monthly payments in real-time.
Key Variables for the Mortgage Calculator
Before we dive into the steps, let’s outline the key variables you’ll need for your mortgage calculator:
- Loan Amount (Principal): The total loan amount you borrow.
- Annual Interest Rate: The interest rate applied to the loan, typically expressed as a percentage.
- Loan Term: The length of the loan, often in years (e.g., 15, 30).
- Monthly Payment: This is what you want to calculate based on the other variables.
Step-by-Step Guide to Creating a Mortgage Calculator in Google Sheets
Step 1: Set Up Your Google Sheet
- Open Google Sheets and create a new, blank spreadsheet.
- Label the first few rows to describe your variables:
| A | B |
|---|---|
| Loan Amount | [Input Amount] |
| Annual Interest Rate | [Input Rate] |
| Loan Term (Years) | [Input Term] |
| Monthly Payment | [Calculated Payment] |
Step 2: Enter the Input Fields
In Column A, you’ll have labels for each input. In Column B, users can enter the values for Loan Amount, Annual Interest Rate, and Loan Term.
- In B2, enter the loan amount (e.g., 250,000).
- In B3, enter the annual interest rate as a percentage (e.g., 3.5).
- In B4, enter the loan term in years (e.g., 30).
Step 3: Calculate the Monthly Payment
To calculate the monthly mortgage payment, you will use the PMT formula in Google Sheets. The formula for calculating the monthly mortgage payment is:
CopyEdit=PMT(rate, number_of_periods, loan_amount)
Formula Breakdown:
- rate: This is the monthly interest rate, which is the annual interest rate divided by 12.
- number_of_periods: This is the total number of payments, which is the loan term in years multiplied by 12.
- loan_amount: This is the loan amount (the principal).
Now, let’s put this formula into your spreadsheet:
- In B5 (next to “Monthly Payment”), enter the following formula:
excelCopyEdit=PMT(B3/100/12, B4*12, -B2)
Explanation of the Formula:
- B3/100/12: Converts the annual interest rate from a percentage into a decimal and divides by 12 to get the monthly rate.
- B4*12: Converts the loan term from years into months (e.g., 30 years becomes 360 months).
- -B2: The loan amount (entered as a negative value to ensure the payment comes out as a positive number).
Step 4: Format the Result
- Currency Format: To make the result look more professional, you can format the monthly payment cell (B5) as currency:
- Select B5.
- Go to Format > Number > Currency.
This will display the monthly payment as a monetary amount, such as $1,123.45.
Step 5: Test the Calculator
Now that you have set up your mortgage calculator, try testing it with different values.
For example:
- Loan Amount: $250,000
- Interest Rate: 3.5%
- Loan Term: 30 years
The Monthly Payment cell (B5) should calculate the monthly payment. If using the above values, the monthly payment will be approximately $1,123.45.
Optional Features to Add
You can also add some optional features to make your mortgage calculator even more useful:
- Total Interest Paid: You can calculate the total interest paid over the course of the loan by multiplying the monthly payment by the number of payments, and then subtracting the loan amount:
excelCopyEdit=(B5*B4*12) - B2
- Amortization Schedule: You could create an amortization schedule to break down each monthly payment into principal and interest. This would be a more advanced feature, but it’s possible by creating a detailed table for each month.
- Extra Payments: Add an option to include extra monthly payments toward the principal and adjust the loan term or monthly payment accordingly.
Example Mortgage Calculator Layout
Here’s a simple example layout:
| A | B |
|---|---|
| Loan Amount | 250,000 |
| Annual Interest Rate | 3.5% |
| Loan Term (Years) | 30 |
| Monthly Payment | $1,123.45 |
| Total Interest Paid | $106,841.21 |
Related Resources
While you’re setting up your mortgage calculator, here are some helpful resources to explore:
Frequently Asked Questions (FAQs)
What is a mortgage calculator?
A mortgage calculator helps you estimate your monthly mortgage payments based on the loan amount, interest rate, and loan term.
How accurate is this calculator?
This calculator provides an estimate based on the inputs you provide. Actual payments may vary due to other factors like property taxes, insurance, or private mortgage insurance (PMI).
Can I add property taxes to this calculator?
Yes, you can manually add property taxes and other costs as part of the monthly payment calculation.
Do I need to pay for this mortgage calculator?
No! Creating a mortgage calculator in Google Sheets is completely free.
Can I use this calculator for other types of loans?
Yes, you can use the same formula for auto loans or any other type of installment loan. Just adjust the terms and inputs accordingly.
Get the Mortgage Calculator Template
If you’d prefer a ready-made template, we’ll be offering a free downloadable Google Sheets Mortgage Calculator soon! Stay tuned for the link!
Want early access? Sign up here to be the first to know when it’s available.