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How to Calculate a Monthly Mortgage Payment

How to Calculate a Monthly Mortgage Payment

Section titled “How to Calculate a Monthly Mortgage Payment”

Most mortgages use a fixed monthly payment based on your loan amount, interest rate, and loan term.

Use the tool: Monthly Mortgage Calculator

1) Monthly payment (principal + interest)

Section titled “1) Monthly payment (principal + interest)”

For a fixed-rate mortgage, the standard payment formula is:

P=r⋅PV1−(1+r)−nP = \frac{r \cdot PV}{1 - (1 + r)^{-n}}

Where:

  • PP = monthly payment (principal + interest)
  • PVPV = loan principal (amount borrowed)
  • rr = monthly interest rate (APR ÷ 12)
  • nn = total number of payments (years × 12)

2) Worked example

Section titled “2) Worked example”

Example: $300,000 loan, 6.5% APR, 30 years.

  • r=0.065/12≈0.0054167r = 0.065/12 \approx 0.0054167
  • n=30×12=360n = 30 \times 12 = 360

That yields a payment of about $1,896/month (principal + interest).

If you want an amortization schedule (interest vs principal over time), use: Amortized Loan Calculator

3) Estimating the full monthly payment (PITI)

Section titled “3) Estimating the full monthly payment (PITI)”

Your all-in monthly housing cost is often:

PITI=P+T+I+PMI (if applicable)\text{PITI} = P + T + I + \text{PMI (if applicable)}
  • TT = property taxes (often annual taxes ÷ 12)
  • II = homeowners insurance (often annual premium ÷ 12)

Tip: A quick rule of thumb is to estimate taxes and insurance as separate monthly line items, then add them to the principal+interest payment.

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