You bought the house for $800,000 exactly five years ago

Finance Mar 12, 2021

You bought the house for $800,000 exactly five years ago. To purchase this house, you made 25 percent down and then, got a 30-year fixed rate mortgage loan. The mortgage rate was 6 percent. What should be your monthly mortgage payment?

Expert Solution

We can calculate the monthly mortgage payment by using the following formula in excel:-

=pmt(rate,nper,-pv,fv)

Here,

Pmt = Monthly mortgage payment

Rate = 6%/12 = 0.5% (monthly)

Nper = (30-5)*!2 = 25*12 = 300 periods (monthly)

PV = $800,000*(1-25%) = $600,000

FV = $0

Substituting the values in formula:

= pmt(0.5%,300,-600000,0)

= $3,865.81

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