Question

You are buying a house 450,000, you put down $50,000 as down payment, took a loan of $400,000 for a conventional long term of 30yrs with fixed interest rate. What should be the monthly payment at 6% annually interest rate.

Answer 1

Loan taken : $400,000

Loan period : 30 years i.e.360 months.

Fixed interest rate :6% annually

so 6% annually interst rate on $400000= $24000 {( 400000*6)/100}

So interest is $24000 annual

Hence monthly interest to be paid is $( 24000/12months)=$2000

Further monthly principal amount to be paid is $(400000/360 months) =$1111.11

So total monthly payment at a fixed 6% annually interest rate on a loan of $400,000 for 30 yrs will be $(1111.11+2000)= $3111.11.

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