Mortgage Calculator

Plan your housing budget with our mortgage payment calculator. Determine your down payment, term length, interest rate, property tax, insurance, and total principal on homes of any value.

Your monthly payment $28.77 3 years fixed loan term

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In order to find the best monthly payment for your home mortgage loan, we’ve provided a calculator that allows you to enter the home value, location, and borrowing terms to estimate your loan payments. Calculate your timeline and monthly budget on any home on the market and gain confidence to negotiate your mortgage. Then, read on for more tips on securing a mortgage and buying a home.

Taking out a mortgage is likely the most significant financial decision of your life. Before making this huge commitment, you should be sure that the mortgage you choose fits your budget. A mortgage calculator is a simple tool that can arm you with the knowledge needed to find the mortgage that will work best for you.

How to calculate a mortgage payment

The mortgage payment is the sum that will determine whether or not you can afford a particular mortgage. Your mortgage payment will be a huge factor in your budget going forward and will determine how much of your money is available for you to enjoy. Whether you’re buying a new home or refinancing, here’s how to use our calculator to find the mortgage payment amount for a particular mortgage.

  • Home Price: In the home price section, input the price of the home that you are planning on purchasing. If you are refinancing, enter the current value of your home.
  • Down Payment: In this section, enter the amount of money you will be setting as the downpayment on your new home. This is the money that you will be paying upfront for the purchase. If you’re refinancing, you should input the amount of equity you currently have in your home. To calculate your home equity, subtract the amount that you still owe on your home from the value of the home.
  • Interest Rate: Input the interest rate of the mortgage you are considering in this section.
  • Loan Term: Enter the number of years over which you will repay the mortgage. The longer the term, the lower the minimum monthly payment.
  • Expenses: Don’t forget to include extra expenses such as property taxes, homeowners insurance, and homeowners association fees in your calculations. They will be costs you have to meet as the owner of a home.
  • Combining Two Mortgages Into One Calculator: If you have more than one mortgage, you can combine the figures from both into our calculator to get an overview of your total payments and financial position. To get a more accurate result, you will need to calculate the weighted average of the interest rates and terms of the different loans.

The Equation For Calculating A Mortgage Payment

The following is the formula for calculating your mortgage payment:

M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]

To break it down, the variables in this formula are:

  • M = your mortgage payment, or the amount that you must pay towards your mortgage each month
  • = the principal amount, or the amount of money you currently owe on your mortgage (not including interest)
  • i = the monthly interest rate. Most lenders give interest rates as an annual figure. To get the monthly rate, you will have to divide the annual rate by 12. For example, with a yearly rate of 5%, the monthly rate would be 0.4617% (0.05/12 = 0.004617).
  • n = the total number of payments you will make towards the loan. If your loan term is 30 years, and you’re making monthly payments, the number of payments will be 360 (30 years x 12 months = 360 payments).

How A Mortgage Calculator Helps You

Buying a house is the largest purchase you will make in your lifetime. Our mortgage calculator gives you insights into how much house you can afford. You need to ensure that your mortgage payment won’t eat up your entire monthly budget.

When buying or refinancing a home, use a mortgage calculator to estimate your monthly mortgage payment. You should switch up the loan term, interest rate, and other factors in the calculator to find the best options for you and your budget. Our mortgage calculator can help you:

  • Take All Costs Into Account. Purchasing a home and taking out a mortgage comes with many expenses beyond paying the principal and interest of your mortgage. Taxes, home insurance, mortgage protection insurance, and homeowners association fees are all ongoing costs you may have to pay. Our calculator allows you to factor in these costs to accurately determine what you can afford.
  • Choose The Right Home For You. Knowing your price range allows you to focus on homes you can afford and stop wasting time looking at properties beyond your limits. Buying above your budget is a mistake that could have costly ramifications for you for years to come, so it is vital to only commit to what you can afford.
  • Find the Best Loan Type. There are various types of mortgages available. For instance, an adjustable-rate mortgage initially offers a very low interest rate, but that rate can jump up significantly after a certain number of years. Make sure you know how much your mortgage payments could increase when your interest rate jumps up.
  • Determine What Downpayment is Right for You. It may be tempting to pay the minimum amount of money upfront. But our calculator can show you the long-term consequences of making a small downpayment. Try changing the downpayment amount and see how much you can save in interest over the life of your mortgage.
  • Determine What Downpayment is Right for You. It may be tempting to pay the minimum amount of money upfront. But our calculator can show you the long-term consequences of making a small downpayment. Try changing the downpayment amount and see how much you can save in interest over the life of your mortgage.
  • Decide on the Right Term Length. Adjusting the length of your mortgage can make a huge difference. For example, a 30-year mortgage will have lower monthly payments, but you will pay more in interest over the life of the loan. On the other hand, a 15-year term mortgage will have higher monthly payments, but you will pay less interest in the long run.

How lenders decide how much you can afford to borrow

Lenders must assess whether or not you can pay your mortgage. They will take many things into account, but the main factor they will consider is your debt-to-income ratio.

Your debt-to-income ratio is the percentage of your income that goes towards paying off debt each month. Most lenders prefer that your loan payments, including your mortgage and all other debts (student loans, credit cards, personal loans, etc.), be less than 36% of your monthly gross income. A low debt-to-income ratio means that you are in a better position to easily pay back your loans.

Typical Costs Included In A Mortgage Payment

A mortgage payment will include more than just the basic cost of your principal loan and interest. Here are all of the primary components that factor into your monthly mortgage payment:

  • The Principal – This is the amount outstanding on the money that you borrowed. Part of your monthly payment will go towards reducing this amount.
  • Interest – These are extra charges that you must pay to the lender for borrowing money. You will pay a percentage of the loan amount in addition to the principal amount. Part of your monthly payment will cover this interest.
  • Property Taxes – Government authorities assess the annual tax payable on your home. This amount is divided by 12 and is added to your mortgage payment.
  • Homeowners Insurance – The policy will cover you for financial loss due to damage to your home from, for example, a fire, storm, or theft. The annual premium is broken into twelve parts which you will pay each month.
  • Mortgage Insurance – If you made a downpayment that was less than 20% of the price of your home, you will likely have to pay mortgage insurance to protect the lender against default. Once your equity increases to more than 20%, insurance should no longer be required.

How To Reduce Monthly Payments

You should try changing factors such as your mortgage interest rate, term, and downpayment in our mortgage calculator to see how you might be able to save money. Here are some factors you should consider:

  • Extending the term of your mortgage will reduce your monthly repayments but increase the amount of interest you pay over the life of your mortgage.
  • Increasing your downpayment will decrease the size of your mortgage. It may also qualify you for a lower interest rate. Both of these factors will reduce your monthly payments.
  • Finding a lower-priced home could reduce the amount you need to borrow and result in a lower monthly payment.
  • Shopping around for a lower interest rate can dramatically decrease the expense of your mortgage in the long run.

Payments Can Go Up

Always keep in mind that several factors can cause your mortgage payments to go up in the future. Taxes and insurance premiums could go up, which would increase your monthly payments. A late payment could result in a fee. Increases in interest rates on an adjustable-rate mortgage will increase your monthly payment.

It is vital to take into account that your monthly payment could increase over time. You should leave enough flexibility in your budget to be able to handle these extra costs.