Free mortgage calculator to help you calculate your monthly mortgage payments based on home price, down payment, terms, and interest rate. We don’t advertise or collect your information – this calculator is free and for educational purposes.
How to use the mortgage calculator
Home price and down payment:Enter the home price and down payment amount or percentage in the designated fields. The mortgage calculator will automatically determine the loan amount (the difference between the home price and the down payment).
Loan term and interest rate:Choose your preferred loan term, offered in 15 or 30 years. Then, input the interest rate as a percentage. If you’re unsure about the current rates, consult with a mortgage professional or conduct research online to find the best available rates.
Private Monthly Mortgage Insurance (PMI):You can choose to check the box to have PMI included in the calculation. Typically, if you have less than 20% for your down payment, your mortgage lender will charge you monthly for PMI.
Property tax and homeowners insurance:Enter the property tax rate and homeowners insurance premium in their respective fields. You have the option to check the box to include or exclude property tax and home owners insurance.
Analyze the results:Review the results provided by the mortgage calculator. This will give you a clearer understanding of your potential monthly mortgage payment and help you determine if the loan terms and property costs are within your budget. You can adjust the input values to explore different scenarios and find the most suitable mortgage options for your financial situation.
Note: Amortization tab:See how much interest you will pay monthly, and over the life of the loan. This is important information when evaluating whether a buying a home is the right choice for you.
Everything you Need to Know When Buying a Home
Top 5 Factors to Consider When Buying a Home and Selecting a MortgageBenefits of Retirement Planning
- Saving for a Down Payment: One of the most critical steps in buying a home is saving for a down payment. Most lenders prefer a down payment of at least 20% of the purchase price. However, some programs allow for a lower down payment, especially for first-time home buyers, as low as 3.5% of the purchase price. It’s crucial to research these programs and determine the best course of action for your financial situation.
- Loan Term: The length of your mortgage can greatly impact the total cost of your home. A shorter loan term typically results in higher monthly payments, but you’ll pay less interest over time. Conversely, a longer loan term will have lower monthly payments but a higher total interest cost. Use our mortgage calculator to compare different loan terms and find the one that best suits your needs.
- Interest Rates: Mortgage rates can vary significantly depending on your credit score, the type of loan, and the lender. It’s essential to shop around for the best rates to save money on your mortgage. Keep in mind that even a small difference in interest rates can translate to thousands of dollars saved over the life of the loan.
- Type of Mortgage: There are several mortgage types available, including fixed-rate, adjustable-rate, and government-backed loans. Each has its own advantages and disadvantages, depending on your individual circumstances. Research each type and consult with a mortgage professional to determine which option is best for you.
- Closing Costs: When buying a home, don’t forget to factor in closing costs. These are fees paid at the closing of a real estate transaction and can include loan origination fees, appraisal fees, title insurance, and more. Closing costs typically range from 2% to 5% of the loan amount. Be prepared for these expenses when planning your home purchase.
Top Tips & Hacks to Save Money on Your Mortgage
- Save for a larger down payment: A larger down payment can result in a lower interest rate and smaller monthly payments. Aim for at least a 20% down payment to avoid private mortgage insurance (PMI) costs.
- Improve your credit score: A higher credit score typically results in lower mortgage rates. Pay your bills on time, reduce your debt-to-income ratio, and avoid applying for new credit before applying for a mortgage. Most notable lenders have credit specialist on staff that can give you advice unique to your situation that can significantly help boost your credit score.
- Choose a shorter loan term: While a shorter loan term means higher monthly payments, it also significantly reduces the total interest paid over the life of the loan, and in some cases the total monthly payment on a shorter term loan may be only marginally higher than a longer term loan – with more of your money going towards the principal
- Extra payments: Making extra payments towards the principal can help you pay off your mortgage faster and save on interest. One extra payment per year on a 30-year mortgage can result in paying off your mortgage in 24 years (6 years early!). Be sure to notify your lender you would like the payment applied to your principal, otherwise most lenders default to applying extra payments towards the next months principal plus interest payment. Check with your lender to ensure there are no prepayment penalties.
- Refinance: If mortgage rates have dropped since you purchased your home, consider refinancing to a lower rate or a shorter term to save on interest payments.
10 Myths or Risks Every Home Buyer Should Know
- You need a 20% down payment to buy a home. While a 20% down payment can help you avoid private mortgage insurance (PMI) and potentially secure a lower interest rate, many loan programs allow for lower down payments. First-time home buyers, in particular, can benefit from FHA loans, VA loans, or USDA loans, which may require little to no down payment.
- Not shopping around for the best mortgage rate. Failing to compare mortgage rates from multiple lenders can result in higher interest rates and overall costs. It’s essential to shop around and consider different loan offers before committing to a mortgage.
- A pre-qualification guarantees a mortgage approval. A pre-qualification is an initial assessment of your financial situation and an estimate of the mortgage amount you may be eligible for. However, it’s not a guarantee of approval. A pre-approval, on the other hand, involves a more in-depth review of your financial situation and is a stronger indication of your eligibility for a mortgage.
- Focusing solely on the interest rate. While the interest rate is a crucial factor in determining your mortgage cost, it’s not the only factor. It’s essential to consider other elements such as points, closing costs, and loan terms when comparing mortgage offers.
- Adjustable-rate mortgages (ARMs) are always a bad choice. Adjustable-rate mortgages can be a good option for some borrowers, particularly those who plan to sell or refinance their homes before the initial fixed-rate period ends. However, it’s crucial to understand the risks associated with ARMs and how rate adjustments may impact your monthly payments.
- Taking on a mortgage you can’t afford. Overextending yourself financially by taking on a mortgage you can’t comfortably afford can lead to financial stress and, in the worst case, foreclosure. Use out mortgage calculator to determine a realistic budget, and ensure you have a stable income and emergency savings to cover at least 6 months of expenses before committing to a mortgage.
- The lowest interest rate is always the best deal. While a lower interest rate can result in significant savings, it’s essential to consider the overall mortgage package. Some lenders may offer a lower interest rate but charge higher fees or have unfavorable terms. Be sure to compare all aspects of a mortgage offer before making a decision.
- Ignoring mortgage prepayment penalties. Some mortgages come with prepayment penalties, which can be costly if you decide to pay off your loan early or refinance. Always check for prepayment penalties when comparing loan offers and consider their potential impact on your future plans.
- Your mortgage payment is your only housing expense. In addition to your mortgage payment, homeownership involves other expenses such as property taxes, homeowners insurance, maintenance, and homeowners association (HOA) fees. Be prepared for these additional costs when budgeting for a home.
- Not locking in your mortgage rate. Mortgage rates can fluctuate daily, and if you don’t lock in your rate, you may end up with a higher rate when it’s time to close on your home. It’s important to discuss rate lock options with your lender and secure the best possible rate for your mortgage.