Monthly payment formula
For a fixed-payment (amortized) loan: M = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the amount borrowed, r is the annual rate ÷ 12, and n is the number of months.
A $250,000 loan at 6.5% for 30 years costs $1,580.17 a month and about $318,861 in total interest.
Repayment types
| Type | Monthly payment | Total interest |
|---|---|---|
| Fixed payment (amortized) | Same every month | Middle |
| Equal principal | Starts high, falls each month | Lowest |
| Interest-only | Interest only, principal at the end | Highest |
What is not included
Property tax, insurance, PMI, HOA dues and lender fees are not part of this calculation. Your lender’s APR and closing documents are the final word.
