Given:-
Nick would like to buy his dream house for $270,000. He finances the whole purchase price of $270,000.
To find the monthly payment if he secures a home mortgage loan at 3% APR for 30 years.
The first step is to calculate an APR payment amount. This is done by adding your closing costs to your loan amount, and then calculating a new monthly payment at your loan's interest rate. In this case, if you borrowed ($270,000.00 + $6,200.00) at 3% for 30 years, your APR monthly payment would be $1,164.47. Notice that this is different than your actual payment of $1,138.33.
The second step is to calculate what interest rate produces a monthly payment equal to the APR payment amount. In this case, we calculate the interest rate that would require a $1,164.47 monthly payment on a loan of 30 years in the amount of $270,000.00. The result is 3.178% which is the APR for your loan.
So we get the details as,