If the purchase price for a house is $218,500, what is the monthly payment if you put 3.5% down for a 30 year loan with a fixed rate of 6.5%?

The down payment is 3.5% of $218,500, so the loan principal is $218,500 × 0.965 = $210,852.50. For a 30-year loan, there are 360 monthly payments, and the monthly interest rate is 6.5% ÷ 12. Using the fixed-payment mortgage formula gives a monthly payment of about $1,332.73, so the best answer is $1,332.73.

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