what formula do I need to use in Excel to calculate a Mortgage payment for a 30 year fixed loan?

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  1. Reply
    January 28, 2011 at 12:32 am
  2. Reply
    January 28, 2011 at 1:23 am
  3. Reply
    January 28, 2011 at 1:58 am

    Use the PMT cell formula function. The syntax is:

    =PMT(monthly rate as decimal, #months, principal).

    Suppose you have a $ 10000 loan 15 years at 6%. The formula is:
    = PMT(0.005, 180, 10000).

  4. Reply
    January 28, 2011 at 2:09 am

    Open Excel, and click insert, then function. Once the dialog box opens, click financial from the dropdown menu under “choose a catagory.” Scroll down and click “PMT” under “choose a function.” A new dialog box will open. For “rate”, make sure you devide by the number of payments within the year assuming the rate in annual. For example, if your interest rate is 7% per year, the calculation will be .07/12 = .005833 This will be your interest rate per month. For “Nper”, multiply the length of the loan by the number of payments within the year. For example 30 Years x 12 months = 360 This will be the total number of monthly payments made for the loan. For “PV” (Present Value), enter the total amount you are borrowing. For example 300000. For “FV” (Future Value) enter 0 assuming your loan will be paid off at the end of 30 years. For “Type” enter a 1 if your scheduled payment is at the beginning of the month, or enter 0 if your payment is at the end of the month. Assuming your scheduled payment is at the beginning of the month, your payment should be 1,984.33 against a $ 300,000 loan at a 30 year 7% fixed. Note that this amount will only include Principle and interest. If you looking for a house, you’ll need to come up with an estimate for taxes and insurance in addition to the payment above, however, for a car, this works like a charm.


  5. Reply
    January 28, 2011 at 2:28 am

    This is your answer. This is the formula that the real estate websites do not want you to know. You must start with pasting the values after the description (i.e. Price) in cell C2.

    =C2Price $ 395,000.00
    =C2*C10Down Payment $ 98,750.00
    =C2-C3Principal $ 296,250.00
    =C5Interest Rate5.375
    =C5/(12*100) Monthly interest in decimal0.004479167
    =C6*12Number of months that loan360
    =C4*(C7/(1-(1+C7)^-C8))Monthly Payment $ 1,658.91
    = C10Down Payment %25.000%

    I am a real estate investor and I can plug numbers into my excel file on the fly and it will tell me if I will make money or not given certain assumptions.

    Let me know if you have any follow up questions.

    Good Luck!!!

  6. Reply
    Finance Pro
    January 28, 2011 at 3:04 am

    To calculate a mortgage payment for a 30 year fixed loan in excel here is the formula – PMT(interest rate/12,# of years*12,amount borrowed)*-1

    for example

    For example, if you want to purchase a property with a sales price of $ 179,000 and are putting 10% down (17,900). The 161,100 (is 90% financed), If you have an interest rate of 7.75%, at 30 years fixed, with a loan amount of 161,100. The calculation looks like this:

    The payment (principal and interest) will come out to $ 1,154.14 a month.

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