A fixed-rate mortgage is a mortgage loan that has a fixed interest rate for the entire term of the loan. Equal payments are made over the life of the mortgage.

$PMT = \frac{\text{Principal}}{\left( \frac{1 - (1 + r)^{-n}}{r} \right)}$

Where:

• PMT = amortized amount for each month
• r = monthly interest rate (annual rate / 12)
• n = total number of months

r = 0.06 / 12 = 0.005, n = 30 × 12 = 360

PMT = \frac{150{,}000}{\left( \frac{1 - (1 + 0.005)^{-360}}{0.005} \right)} = \`$899.33`

To find the principal portion of the first payment:

• Interest portion = $150,000 × 0.005 = $750
• Principal portion = $899.33 − $750 = $149.33

On a financial calculator:

• N = 360
• I/Y = 0.5% (6/12)
• PV = -150,000
• FV = 0
• CPT ⇒ PMT = $899.33