A mortgage payment is the fixed monthly amount paid to a lender to repay a home loan over a set term. Each payment covers a portion of the principal (loan balance) and the accrued interest for that period.
M = P × [r(1+r)^n] / [(1+r)^n − 1]
M = monthly payment, P = loan principal, r = monthly interest rate (annual rate ÷ 12), n = total number of payments (loan term in years × 12)
Example 1: $300,000 loan at 6.5% annual interest over 30 years
Result: $1,896.20 per month
Example 2: $200,000 loan at 4% annual interest over 15 years
Result: $1,479.38 per month
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