How to Compute Monthly Amortization

Do you want to verify, kung tama ang monthly amortization na binigay sayo ni bank or agent?

Are you planning to pay a higher DP or restructure your loan term and would like to know how much will be the new monthly?

In both scenarios, you need to learn how to compute Monthly Amortization!

Simple Arithmetic lang yan!

How to Compute

The easiest way to compute monthly amortization is to multiply the loan amount or principal and the corresponding factor rate depending on loan term and interest rate:

Monthly Amortization = Principal X Factor Rate

• Monthly Amortization – the amount that you will have to pay the bank monthly
• Principal or Loanable Amount – the original amount being borrowed from the bank
• Factor Rate – a pre-computed number that you need to multiply to the principal to find the monthly amortization

For example, lets assume you want to borrow Php3,000,000 for 20 years at 7% interest. To solve for Monthly Amortization, you have to find the corresponding factor rate for 20yrs at 7% interest which is 0.007753 (see Table 1 below).

Simple Arithmetic lang di ba?

Factor Rates

Please see the images below for the usual factor rates including the factor rates for Pag-Ibig as of July 2024:

Mortgage Calculator

If you cannot find the factor rate for your desired payment term, you can also use the mortgage calculator below to compute for your monthly amortization/ mortgage.

To use the calculator, simply fill-up the following, then press the Calculate button.

• Purchase Price – the Total Contract Price (TCP) of the property
• Downpayment – the amount that you will not be included in the loan amount or principal
• Term in Years – the length of your loan in years
• Interest Rate – the annual interest for the home loan. For estimation purposes, the recommended rate is 7% for banks and 6.25% for Pag-Ibig.

If you have any more questions, feel free to contact us.