Mortgage Calculator

Estimate your monthly payments and see your financing options.

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Years
Amount Financed:$0.00
Total Interest:$0
Estimated Monthly Payment$0

Cost Breakdown

Cost of Loan
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Amortization Schedule

Breakdown of your monthly principal and interest.

How to Calculate Your Home Mortgage Loan Payments

Buying a new or used home is a significant financial commitment. Our Home Mortgage Loan Calculator helps you estimate your monthly payments, see how much interest you will pay over the life of the loan, and determine exactly how much you can afford.

By adjusting the loan term, interest rate, and down payment, you can find a financing plan that fits your monthly budget.

Steps to Use This Calculator

  1. Enter House Price: Input the total purchase price of the home (after negotiations but before tax/title fees).
  2. Input Interest Rate (APR): Enter the annual percentage rate. Your rate depends on your credit score and whether the home is new or used.
  3. Select Loan Term: Choose how many years you will be paying off the loan. Common terms are 10, 15, 20, and 30 years.
  4. Add Down Payment: Enter the amount of cash you are paying upfront or down payment.

Understanding Your Loan Factors

Loan Term

The length of your loan affects your monthly payment and total interest. A longer term (e.g., 30 years) lowers your monthly payment but increases the total interest paid. A shorter term increases the monthly cost but saves you money in the long run.

Interest Rate (APR)

Your Annual Percentage Rate (APR) is the cost of borrowing money. New Homes typically have lower interest rates than old Homes. Borrowers with excellent credit scores (720+) usually qualify for the lowest rates.

What is Amortization?

Amortization refers to how your payments are split between Principal (the house's cost) and Interest (the bank's profit). In the beginning of your loan, a larger portion of your payment goes toward interest. As time goes on, more of your payment goes toward paying off the home itself.

Frequently Asked Questions

Does a down payment lower my monthly rate?

Yes. A larger down payment reduces the principal loan amount. This lowers both your monthly payment and the total interest you pay over the life of the loan.

What is a good Home Mortgage loan interest rate?

Interest rates fluctuate based on the federal rate and the economy. Generally, a rate below 5% is considered excellent, while rates above 10% are common for borrowers with lower credit scores or for older used vehicles.

Should I include sales tax in the calculator?

For the most accurate estimate, you should add sales tax and title fees to the "House Price" field. These fees are usually rolled into the loan financing.

Demystifying Your Mortgage

A mortgage is more than just a monthly bill; it's a long-term financial relationship between you and your lender. Our Mortgage Calculator breaks down your monthly payment into its core components: Principal and Interest (P&I). However, true home affordability involves more than just the loan repayment.

When budgeting for a home, you must account for "PITI": Principal, Interest, Taxes, and Insurance. Depending on where you live, property taxes and insurance can add hundreds of dollars to your monthly obligation.

The 28/36 Rule

Lenders often use this rule to decide if you qualify. Your housing expenses (mortgage + tax + insurance) should not exceed 28% of your gross monthly income. Your total debt (housing + cars + credit cards + student loans) should not exceed 36%.

Understanding PMI

Private Mortgage Insurance (PMI) is a fee lenders charge if your down payment is less than 20%. It protects the bank, not you. PMI typically costs 0.5% to 1% of the loan amount annually. Once you reach 20% equity in your home, you can request to have PMI removed.

Fixed-Rate vs. Adjustable-Rate (ARM)

Fixed-Rate Mortgages (15 or 30 years): The interest rate never changes. Your P&I payment remains exactly the same for the life of the loan. This offers stability and is the preferred choice when interest rates are low.

Adjustable-Rate Mortgages (ARM): These loans start with a lower introductory rate for a set period (e.g., 5 or 7 years). After that, the rate adjusts annually based on the market. ARMs can be risky; if rates skyrocket, so does your monthly payment.

Home Financing FAQs

What is Escrow?

An escrow account is like a savings account managed by your lender. Part of your monthly payment goes into this account to pay your property taxes and homeowners insurance when they are due.

Does a 15-year mortgage save money?

Yes, significantly. A 15-year mortgage usually comes with a lower interest rate and you pay interest for half the time compared to a 30-year loan. However, the monthly payments are much higher.

Pre-qualification vs. Pre-approval?

Pre-qualification is a rough estimate based on self-reported data. Pre-approval is a verified commitment from a lender after checking your credit and income documents. Sellers take pre-approval letters much more seriously.