### Intro:

The following formula is used to calculate the fixed monthly payment,
P, required to fully amortize a loan of
L dollars over a term of
n months at a monthly interest rate of
c. **NOTE:** If the
quoted rate for the loan is 6%, c is
calculated as 0.06/12 or
.005

For more information about how this works, check out the Mortgage Professor's website.

### The Formula:

P = L[c(1 + c)^{n}] / [(1 + c)^{n} - 1]

LEGEND:

P = Your fixed
monthly payment.

L = The total
loan amount in dollars.

c = The interest
rate. NOTE: If the quoted
interest rate is 6%, c is calculated as (0.06 / 12) ==> 0.005

n = The
term (number of months) for the loan.

### Example Scenario:

Let's say your loan amount is $121,200 (L = 121,200), your interest rate is: 2.875% (c = 0.02875/12), and the term of your loan is 180 months or 15 years (L = 180), then your fixed monthly payment, P, will be: $829.72

To run this example scenario, press the
*Run Example Scenario* button below.

### Monthly Payment Calculator:

To run your own mortgage scenario, enter the appropriate values in the
form fields below and then press the *Calculate
Your Monthly Payment* button.