How it works.
The PMT function calculates monthly or annual loan payments. To find a monthly payment, you must divide the annual interest rate by 12 and multiply the number of loan years by 12 to get the total number of periods.
💡 In simple terms.
Calculates the monthly payment for a loan (like a house mortgage or car loan) based on interest rate and loan term.
"Think of this like calculating how much pocket money you have to pay back each month for buying a console on loan."
Syntax guide.
Parameters
The interest rate for the loan. Divide annual rate by 12 for monthly.
The total number of payments for the loan. Multiply years by 12 for monthly.
The present value, or the total amount that a series of future payments is worth now (loan principal).
The future value, or cash balance wanted after last payment is made. Defaults to 0.
Default: 00 = Payments due at end of period (default), 1 = Payments due at start of period.
Default: 0Interactive formula builder.
Fill in the input arguments below to construct your custom formula string. Copy it directly to paste into your Excel spreadsheets.
Best Practices
- The payment returned by PMT is a negative number because it represents cash going out. Wrap the PV or the entire formula in a minus sign (e.g. `=-PMT(...)`) to display the result as a positive number.
- Be extremely careful to use consistent units for rate and nper.
Common Gotchas
- PMT calculates principal and interest only. It does not account for taxes, insurance, or transaction fees.