Calculating Mortgage Payments in Python

We can use Python to calculate mortgage payments when purchasing a home. Let’s consider the following:

• Home cost: $430,000
• Down payment: 6%
• Interest rate: 3.12%
• Insurance: $131
• Property taxes: 0.086%
• Loan type: 30-year fixed

We begin by importing numpy and calculating the down payment. Based on the calculations below, we see the down payment will cost $25,800, leaving a balance of $404,200.

Now let’s calculate the monthly interest rate. As listed above, the total interest rate for this property is 3.12%. However, we cannot calculate the monthly interest rate by simply dividing 3.12 by 12.

Based on the calculations below, we see the monthly interest rate is 0.256%

So, we have the total loan amount after the down payment. We have the monthly interest rate. And we know how many total payments we will have to make (30 years x 12 months = 360 payments).

We now determine the total monthly payment, before taxes and insurance, to be $1720.79.

Finally, we’ll add the insurance and taxes to determine the total monthly payment.

And now, we see the total monthly payments, after taxes and insurance, is $2221.59.