Mortgage Payment Calculator with Formula
Calculate the monthly principal and interest payment on a fixed-rate mortgage from home price, down payment, rate, and term, with a worked example.
Worked example
- Home price
- $400,000.00
- Down payment
- $80,000.00 (20%)
- Loan amount (P)
- $320,000.00
- Annual interest rate
- 6.5%
- Loan term (years)
- 30
- Monthly interest rate (r)
- 0.0054167
- Number of monthly payments (n)
- 360
- Monthly principal & interest (M)
- $2,022.62
Formula
The monthly principal and interest payment depends on three numbers: the loan amount (home price minus down payment), the monthly interest rate (the annual rate divided by 12), and the number of monthly payments (years × 12).
Every payment is the same size. Early payments are mostly interest; later payments are mostly principal. Payments are rounded to the cent, and at a 0% rate the loan is simply divided evenly across all payments.
M = P × r × (1 + r)^n ÷ ((1 + r)^n − 1)
r = 6.5% ÷ 12 = 0.0054167
n = 30 × 12 = 360
M = 320,000 × 0.0054167 × (1 + 0.0054167)^360 ÷ ((1 + 0.0054167)^360 − 1) = 2,022.62
Estimates are informational only. They do not include closing costs, maintenance, utilities, or lender-specific fees. This is not financial, tax, or legal advice.
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