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How Do I Calculate Paying Down the Principal on a Mortgage?

how to calculate principal and interest on a mortgage

by Grant D. McKenzie

Paying additional principal can save money over the life of a mortgage loan.

Enter the initial amount of the loan, the monthly percentage rate -- the annual percentage rate (APR) divided by 12 -- and the term of the loan in months in three adjacent cells in your spreadsheet program. Calculate the monthly payment in a nearby cell. Example: $500,000 30-year loan at 6 percent APR Cell A1 = "500000" (loan value) Cell B1 = "=0.06/12" (APR converted to monthly interest rate) Cell C1 = "=30*12" (loan term converted to months) Cell A3 = "=-PMT(B1,C1,A1)"

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