The monthly payment formula looks scary but is simple in practice:
M = P × r(1+r)ⁿ ÷ ((1+r)ⁿ − 1)
P = loan amount, r = monthly rate, n = number of payments.
Example: $320,000 loan, 6.5%, 30 years
- r = 0.065 ÷ 12 = 0.005417, n = 360
- M = 320,000 × 0.005417 × (1.005417)³⁶⁰ ÷ ((1.005417)³⁶⁰ − 1) ≈ $2,022/mo principal & interest
PITI
Your real payment adds property tax + insurance (and HOA). On a $400k home that's often +$500–800/mo.
Skip the algebra — our Mortgage Calculator computes the full PITI payment live, and the Amortization Calculator shows how each payment splits over time.