Mortgage Calculator – See Easy Ways to Calculate Your Mortgage

Mortgage Calculator Payment
Mortgage Calculator Payment

The Mortgage Calculator helps estimate the monthly payment due along with other financial costs associated with mortgages. There are options to include extra payments or annual percentage increases of common mortgage-related expenses. The calculator is mainly intended for use by U.S. residents.

Most people need a mortgage to finance a home purchase. Use our mortgage calculator to estimate your monthly house payment, including principal and interest, property taxes, and insurance. Try out different inputs for the home price, down payment, loan terms, and interest rate to see how your monthly payment would change.

Important Points to Remember
  • Using a mortgage calculator will help you figure out how much house you can afford based on a variety of factors.
  • You have the option of choosing the loan term, interest rate, down payment, and whether or not to include taxes, fees, or insurance in the monthly payment.
  • The results will show how the payments are split between interest and principal.
  • Longer-term loans and consumers with lower credit ratings typically have higher interest rates.
Mortgages

A mortgage is a loan that is secured by property, most commonly real estate.

It is defined by lenders as money borrowed to purchase real estate.

In essence, the lender assists the buyer in paying the seller of a home, and the buyer promises to repay the money borrowed over a period of time, which in the United States is commonly 15 or 30 years.

A payment is made from the buyer to the lender every month.

The principal, or the original amount borrowed, is a percentage of the monthly payment.

The other part is interest, which is the cost of borrowing money paid to the lender.

To cover the expense of property taxes and insurance, an escrow account may be used.

Until the last monthly payment is paid, the buyer cannot be regarded the full owner of the mortgaged property.

The standard 30-year fixed-interest loan is the most typical mortgage loan in the United States, accounting for 70 percent to 90 percent of all mortgages.

Mortgages are the most common way for most people in the United States to acquire a home.

Mortgage Calculator Results Explained

To use the mortgage calculator, provide the following information about the loan:

  • Home price: The cost of purchasing a home.
  • Down payment: The amount of money paid up front to purchase a home, expressed as a proportion of the total loan amount.

Your interest rate is affected by the size of your down payment; lenders normally offer lower rates if you make a greater down payment.

(The default is 20%.)

  • Loan term: The period you have to pay back the loan.

In general, the longer the period, the smaller your monthly payment will be, but you will pay more interest in the long run.

The shorter the term, the greater your monthly payment and the lower your interest rate.

(The default value is 30 years.)

  • Loan APR: The cost of borrowing money expressed as a percentage of the loan.

Alternatively, you can see an interest rate estimate by entering your credit score range.

(The default is the national average from the previous month.)

  • Property taxes: An annual tax levied by your city, county, or municipality on real property owners. (The national average is the default.)
  • Homeowners insurance: Your annual premium for theft, fire, natural disasters, personal liability claims, and other insured risks for your house and personal items.

Borrowers are required to get home insurance by their lenders.

Your lender may also require flood insurance if you reside in a flood-prone location.

You may also require earthquake coverage if you live in an area prone to earthquakes.

(The national average is the default.)

  • HOA fees: The monthly amount you pay to your homeowners’ association (HOA), if the property you’re interested in has one, to help offset the cost of sustaining and enhancing the association’s assets and services.
Components of a Mortgage Calculator

A mortgage usually includes the following main components.

These are the same components that make up a mortgage calculator.

Loan Amount

The amount borrowed from a lender or bank is known as the loan amount. This is the purchase price less any down payment on a mortgage.

The maximum loan amount is usually proportional to household income or affordability.

Please use our House Affordability Calculator to estimate an affordable amount.

Down Payment

The initial payment for a purchase, which is usually a percentage of the entire cost.

This is the amount of the purchase price that the borrower is responsible for.

Typically, mortgage lenders require a 20% down payment or more from the borrower.

Borrowers may put down as little as 3% in some instances.

Borrowers who make a down payment of less than 20% will be compelled to pay private mortgage insurance (PMI).

Borrowers must keep this insurance until the loan’s remaining principal falls below 80% of the original purchase price of the home.

A basic rule of thumb is that the higher the down payment, the lower the interest rate and the greater the likelihood that the loan would be authorized.

Loan Term

The length of time required to repay the loan in full.

The majority of fixed-rate mortgages have periods of 15, 20, or 30 years.

A lower interest rate is often associated with a shorter duration, such as 15 or 20 years.

Interest Rate

The proportion of the loan levied as a borrowing expense.

Fixed-rate mortgages (FRM) and adjustable-rate mortgages (ARM) are two types of mortgages (ARM).

As the name implies, interest rates are fixed for the duration of the FRM loan.

The calculator above only computes fixed rates.

Interest rates on ARMs are typically fixed for a set length of time before being modified on a regular basis based on market indexes.

ARMs shift some of the risk to the borrower.

As a result, the starting interest rates are typically 0.5 percent to 2% cheaper than FRM for the same loan duration.

Annual Percentage Rate (APR), often known as nominal APR or effective APR, is the standard unit of measurement for mortgage interest rates.

It is the annual interest rate multiplied by the number of compounding periods in a year.

For instance, if a mortgage rate is 6% APR, the borrower will have to pay 6% divided by twelve, which is 0.5 percent in interest per month.

How to Calculate Your Mortgage Payments

The arithmetic behind mortgage payments is complex, but Bankrate’s Mortgage Calculator makes it simple and straightforward.

First, input the price (if you’re buying) or the current value of your home (if you’re refinancing) next to the “Home price” field.

Fill in the amount of your down payment (if you’re buying) or the amount of equity you have (if you’re refinancing) in the “Down payment” column.

A down payment is the money you put down when you buy a house, while home equity is the difference between the house’s worth and the amount you owe.

You have the option of entering a dollar sum or a percentage of the purchase price.

Then you’ll see “Loan Length.”

Our calculator changes the repayment schedule based on the length you choose – normally 30 years, but it might be 20, 15, or 10 years.

Finally, put the rate you plan to pay in the “Interest rate” box.

Our calculator uses the current average rate as a default, but you can change the percentage.

A fresh amount for principal and interest will display on the right as you enter these values.

Property taxes, homeowners insurance, and homeowners association fees are also estimated using Bankrate’s calculator.

As you browse for a loan, you can change or disregard these figures – they’ll be rolled into your escrow payment, but they won’t effect your principal and interest while you’re weighing your options.

Mortgage payment formula

Mortgage payment formula

SymbolMeaning
Mthe total monthly mortgage payment
Pthe principal loan amount
ryour monthly interest rate Lenders provide you an annual rate so you’ll need to divide that figure by 12 (the number of months in a year) to get the monthly rate. If your interest rate is 5 percent, your monthly rate would be 0.004167 (0.05/12=0.004167).
nnumber of payments over the loan’s lifetime Multiply the number of years in your loan term by 12 (the number of months in a year) to get the number of payments for your loan. For example, a 30-year fixed mortgage would have 360 payments (30×12=360).

This formula might assist you in calculating how much house you can afford.

Using our Mortgage Calculator can take the guesswork out of determining if you’re putting down enough money or if you can or should adjust your loan term.

It’s always a good idea to shop around for rates with a few different lenders to be sure you’re getting the best deal possible.

Homeownership and Mortgage-Related Expenses

The majority of the financial costs connected with owning a home are usually monthly mortgage payments, but there are other significant fees to consider.

These expenses are broken down into two types: recurring and non-recurring.

Recurring Costs

The majority of recurring fees are present throughout and after the term of a mortgage.

They are a key source of revenue.

As a result of inflation, property taxes, house insurance, HOA fees, and other costs rise with time.

The recurring charges are listed under the “Include Options Below” checkbox in the calculator.

Under “More Options,” the calculator also has extra inputs for annual percentage increases.

These can help you make more precise computations.

Property Taxes

Property taxes are a type of tax that property owners pay to the government.

Property tax is usually controlled by local or county governments in the United States. Local property taxes are imposed in all 50 states.

The annual real estate tax varies by area in the United States; on average, Americans pay roughly 1.1 percent of their property’s value in property tax each year.

Home Insurance

Home insurance is a type of insurance that protects the owner of a home from accidents that may occur on the property.

Personal liability coverage, which protects against lawsuits involving injuries that occur both on and off the property, is available as an add-on to home insurance.

The cost of home insurance varies depending on a number of criteria, including the location, the state of the property, and the amount of coverage.

Private mortgage insurance (PMI) covers the lender in the event that the borrower defaults on the loan.

If the down payment is less than 20% of the property’s worth in the United States, the lender will often compel the borrower to purchase PMI until the loan-to-value ratio (LTV) reaches 80% or 80%.

PMI costs vary depending on criteria like as down payment, loan size, and borrower credit.

The annual cost is usually between 0.3 and 1.9 percent of the loan amount.

HOA Fee

A fee levied on a property owner by a homeowner’s association (HOA), an organization that maintains and enhances the property and environment of the neighborhoods under its jurisdiction. HOA fees are often required for condominiums, townhomes, and certain single-family residences. Annual HOA fees are typically less than one percent of the property value.

Other Cost

This includes utilities, home maintenance expenditures, and anything else related to the general upkeep of the property. Annual maintenance costs typically account for 1% or more of the property’s worth.

Non-Recurring Costs

These expenses aren’t included in the calculator, but they’re still crucial to consider.

Closing Costs

Fees paid at the completion of a real estate transaction.

These are not regular charges, although they can be costly.

A mortgage closing cost in the United States may include an attorney fee, title service fees, recording fees, survey fees, property transfer tax, brokerage commission, mortgage application fee, points, appraisal fee, inspection fee, home warranty, pre-paid home insurance, pro-rata property taxes, pro-rata homeowner association dues, pro-rata interest, and other costs.

These expenses are normally borne by the buyer, but a “credit” might be negotiated with the seller or lender.

On a $400,000 transaction, it is not uncommon for a buyer to pay around $10,000 in total closing fees.

Initial Renovations

Some buyers want to improve their homes before moving in. Renovations can include altering the flooring, repainting the walls, modernizing the kitchen, or completely renovating the interior or exterior. While these costs can quickly pile up, renovation charges are voluntary, and owners may choose not to address remodeling issues right away.

Miscellaneous

Typical non-recurring costs of a home purchase include new furnishings, new appliances, and relocation charges. This covers the expense of repairs.

Extra Payments & Early Repayment

Mortgage borrowers may wish to pay off their mortgages sooner rather than later for a variety of reasons, including but not limited to interest savings, the desire to sell their house, or refinancing.

Our calculator can account for extra payments made on a monthly, yearly, or one-time basis.

Borrowers must, however, be aware of the benefits and drawbacks of paying off their mortgage early.

Strategies for Early Repayment

Aside from paying off the mortgage debt altogether, there are three basic ways for repaying a mortgage loan sooner. Borrowers primarily use these tactics to save money on interest. These strategies can be used in conjunction or alone.

Make Additional Payments

This is simply an additional payment above and beyond the regular amount. On normal long-term mortgage loans, a large amount of the first payments will be used to pay down interest rather than principal. Any additional payments will reduce the loan total, lowering interest and allowing the borrower to pay off the loan sooner in the long term. Some people make it a habit to pay more every month, while others pay more whenever they can.

The Mortgage Calculator has possible inputs for several extra payments, and it might be useful to compare the consequences of augmenting mortgages with or without extra payments.

Biweekly Payments

Every two weeks, the borrower makes half of the monthly payment. With 52 weeks in a year, this equates to 26 installments or 13 months of mortgage payments. This strategy is primarily for people who get paid monthly. It is easier for them to develop the habit of deducting a portion of each paycheck for mortgage payments. For comparison, biweekly payments are displayed in the calculated results.

Refinance to a Shorter-Term Loan

Refinancing entails taking out a new loan to pay off an old loan.

Borrowers can use this method to reduce the period, which usually results in a lower interest rate.

This can speed up the repayment process and save money on interest.

This, however, frequently results in a higher monthly payment for the borrower.

In addition, while refinancing, a borrower will almost certainly be required to pay closing expenses and fees.

Reasons for Early Repayment

Making additional payments has the following advantages:

  • Lower interest costs—Borrowers can save money on interest, which is generally a large price.
  • Shorter repayment duration—A shorter repayment period means that the loan will be paid off sooner than the original term specified in the mortgage agreement. As a result, the borrower pays off the mortgage more quickly.
  • Personal satisfaction—the sense of emotional well-being that comes with being debt-free. Borrowers who are debt-free are also able to spend and invest in other areas.

The Disadvantages of Early Repayment

Extra payments, however, have a cost.

Before making a mortgage payment, borrowers should consider the following factors:

Possible prepayment penalties

A prepayment penalty is an agreement between a borrower and a mortgage lender that governs what the borrower is allowed to pay off and when. It is most typically explained in a mortgage contract.

Penalty amounts are often represented as a percentage of the outstanding debt at the time of prepayment or as a number of months’ interest.

The penalty amount often reduces over time until it eventually phases out, which is usually within 5 years.

A one-time payments due to the sale of a home is usually excluded from the prepayment penalty.

Opportunity Costs

Because mortgage rates are low in comparison to other financial rates, paying off a mortgage early may not be ideal. For example, paying out a mortgage at a 4% interest rate when one might potentially earn 10% or more by investing that money is a large opportunity cost.

Capital Invested in the Home

Money invested in the home is cash that the borrower cannot spend elsewhere. This may eventually force a borrower to take out another loan if an unexpected monetary requirement develops.

Loss of tax deduction

In the United States, borrowers can deduct mortgage interest charges from their taxes. Reduced interest payments result in a smaller deduction. However, this advantage is only available to taxpayers who itemize rather than take the standard deduct.

Mortgage Calculator: Alternative Uses

A mortgage calculator is most commonly used to estimate the payment on a new mortgage, but it can also be used for other purposes.

Here are some other applications:

Plan on paying off your mortgage early.

Use Bankrate’s mortgage calculator’s “Extra payments” feature to learn how you can reduce your term and save more money in the long run by making extra payments against your loan’s principal.

You can make these extra payments on a monthly, annual, or one-time basis.

To see how much interest you’ll wind up paying and your new payoff date, select the “Amortization / Payment Schedule” link and enter a hypothetical amount into one of the payment categories (monthly, yearly, or one-time), then click “Apply Extra Payments.”

Determine whether an ARM is worth the risk.

An adjustable-rate mortgage, or ARM, offers a lower beginning interest rate. While an ARM may be suitable for some borrowers, others may discover that the lower initial interest rate does not reduce monthly payments as much as they believe.

To get an idea of how much you’ll save in the beginning, enter the ARM interest rate into the mortgage calculator and leave the term at 30 years. Then, compare those payments to those obtained by entering the rate for a traditional 30-year fixed mortgage. This may reinforce your original optimism about the benefits of an ARM – or provide a reality check on whether the possible benefits of an ARM truly outweigh the hazards.

Find out when you should get rid of private mortgage insurance?

You can use the mortgage calculator to figure out when you will have 20% equity in your house.

That is the golden figure for requesting that a lender forego the requirement for private mortgage insurance.

If you put less than 20% down when you bought the house, you’ll have to pay a monthly charge on top of your usual mortgage payment to offset the lender’s risk.

That cost is waived once you have 20% equity, which equals more money in your pocket.

Simply enter the initial loan amount and the closing date, then click “Show Amortization Schedule.”

How Will a Mortgage Payment Calculator Assist Me?

If you’re thinking about financing a house purchase, a mortgage calculator might be an invaluable tool.

This is due to the fact that a decent mortgage calculator:

Assists you in calculating your monthly mortgage payment.

A mortgage calculator will show you what your monthly payment might be.

This is a critical initial step in the home-buying process.

Considers other household costs.

A decent mortgage calculator takes into account not only principal and interest, but also other property bills such as taxes, house insurance, private mortgage insurance, and homeowners’ association dues.

Knowing these fees can assist you in determining a property price that you can afford.

Focuses your house search.

Mortgage payment estimates are a fantastic place to start when looking for a home.

Instead of wasting time looking at residences that are out of your price range, you may concentrate on homes that are within your budget.

In general, never buy a home that is out of your price range.

Of course, it’s not a good idea to buy too far below your price range if it means having to sell and buy again in a few years.

Allows you to experiment with various scenarios.

It’s simple to alter one or more values in a mortgage calculator to see how it impacts your monthly payment, mortgage interest, and total loan cost.

This is a simple method for determining your best loan.

Displays how various loan kinds compare.

A calculator conducts the math for you, allowing you to rapidly compare various loan options.

A 30-year fixed-rate mortgage, for example, offers lower payments but requires more interest.

The installments on a 15-year loan are greater, but you will pay less interest throughout the life of the loan.

How Much House Can I Afford?

Your debt-to-income ratio (DTI)—the percentage of your gross monthly income that goes toward paying your monthly debt payments—is one of the primary variables lenders look at to decide how much house you can buy.

A low DTI indicates that you have a good debt-to-income ratio, whereas a high DTI indicates that your debt may be too high for your income.

In general, the most DTI you may have and still qualify for a mortgage is 43 percent.

Nevertheless, most lenders prefer DTIs of no more than 36 percent, with housing expenditures (including your mortgage payment) accounting for no more than 28 percent of total debt (the “28/36 rule”).

The amount of money available for a down payment and closing costs is another aspect that impacts how much house you can purchase.

Though a greater down payment may result in a larger mortgage (and a larger house), make sure you’ll have enough money to furnish and live in the home.

Of course, just because a lender qualifies you for a loan does not obligate you to borrow the full amount.

A lower monthly loan payment gives you some wriggle room, which could come in handy in an emergency or if something unexpected happens (say, a pandemic).

A smaller payment also makes it easier to save for other objectives and build your retirement nest fund.

Different Types of Mortgage Calculator
  • Simple mortgage calculator
  • Google mortgage calculator
  • Mortgage calculator usa
  • Mortgage calculator amortization
  • Zillow mortgage calculator
  • Accurate mortgage calculator
  • Mortgage interest calculator
  • Mortgage calculator with taxes
Mortgage Calculators by State
  • Arizona Mortgage Calculator
  • California Mortgage Calculator
  • Colorado Mortgage Calculator
  • Connecticut Mortgage Calculator
  • Florida Mortgage Calculator
  • Hawaii Mortgage Calculator
  • Idaho Mortgage Calculator
  • Massachusetts Mortgage Calculator
  • Minnesota Mortgage Calculator
  • New Jersey Mortgage Calculator
  • Nevada Mortgage Calculator
  • New York Mortgage Calculator
  • North Carolina Mortgage Calculator
  • Ohio Mortgage Calculator
  • Oregon Mortgage Calculator
  • Pennsylvania Mortgage Calculator
  • South Carolina Mortgage Calculator
  • Texas Mortgage Calculator
  • Utah Mortgage Calculator
  • Virginia Mortgage Calculator
FAQs

What Is a $300,000 Mortgage Payment Like?

A $300,000 mortgage will cost you $1,620 a month in interest and principal for a 30-year loan with a fixed 4-percentage-point interest rate. At 6% fixed interest, that cash grows to $1,986. When taxes, mortgage insurance, and other expenses are included in, the monthly payment rises even further.

What is the monthly payment on a $200,000 house?

Your monthly payment on a $200,000, 30-year mortgage with a 4% fixed interest rate would be $954.83 – not counting taxes or insurance. However, these might vary substantially based on your insurance policy, loan type, down payment amount, and other factors. Credible can assist you with your pre-approval.