Mortgage Calculator
Summary
Monthly Payment: $0.00
Total Interest Paid: $0.00
Total Cost of Loan: $0.00
Payoff Date: N/A
4 Simple Steps to Calculate Your Mortgage Payments
Using our mortgage calculator is a straightforward way to estimate your monthly payments. Follow these easy steps to get started:
- Input Your Home Price
Start by entering the price of the home you’re purchasing or the current value of your home if refinancing. - Enter Your Down Payment
Specify your down payment amount. This can be either a dollar figure or a percentage of the home’s price. If you’re refinancing, input the equity you have. - Select Your Loan Term
Choose the length of your loan. Common terms are 30, 20, 15, or even 10 years. The term affects your monthly payment and the total interest paid over the life of the loan. - Provide Your Interest Rate
Enter the interest rate you expect to pay. If you don’t have a specific rate in mind, our calculator uses the current average rate, which you can adjust as needed.
Additional Features
Our calculator also allows you to estimate additional costs such as property taxes, homeowners insurance, and HOA fees. You can modify these amounts as you shop for the best loan options.
For those interested in prepaying their mortgage, our “Amortization” tab lets you input extra payments, helping you assess the benefits of paying off your mortgage sooner.
Understanding Your Mortgage Payment Breakdown
The primary components of your mortgage payment include:
- Principal: The amount borrowed from the lender.
- Interest: The cost of borrowing that amount, expressed as an annual percentage.
- Property Taxes: Local authorities levy taxes on your property. If you have an escrow account, a portion of your monthly payment goes towards this tax.
- Homeowners Insurance: This covers potential damage to your home. Like property taxes, you pay a fraction of your annual premium each month.
- Mortgage Insurance: If your down payment is less than 20%, you’ll likely need to pay mortgage insurance premiums, which will be added to your monthly costs.
The Mortgage Payment Formula
For those who prefer to calculate manually, here’s a helpful formula:
[ M = P \cdot \frac{r(1 + r)^n}{(1 + r)^n – 1} ]
Where:
- M = Total monthly mortgage payment
- P = Principal loan amount
- r = Monthly interest rate (annual rate divided by 12)
- n = Total number of payments (loan term in years multiplied by 12)
For example, with a 5% annual interest rate, your monthly rate would be approximately 0.004167 (5% ÷ 12).
Other Costs to Consider
In addition to your monthly payment, consider other costs associated with obtaining a mortgage. Closing costs can range from 2% to 5% of the total loan amount and may include:
- Lender fees for processing your loan
- Municipal fees for recording your purchase
- Professional fees for real estate agents, attorneys, or notaries
These costs are typically paid upfront on closing day but can sometimes be rolled into your mortgage, increasing your overall payments.
