Mortgage Calculator
How to Use Mortgage Calculator
So, you’re thinking about buying a home or maybe refinancing, and you want to know what your monthly payments might look like. No worries, we’ve got you covered with a handy mortgage calculator. Here’s how to use it:
Home Price or Current Value
If you're buying, enter the home price. If you're refinancing, enter the current value.
Down Payment
For buyers, put in the amount you plan to pay upfront. If you're refinancing, enter your home equity.
Interest Rate and Loan Term
On a computer, type in the interest rate and adjust the loan term in years. On mobile, tap "Refine Results" to find the rate field and adjust the loan term.
Additional Costs
You can add your own estimates for property taxes, homeowners insurance, and association fees.
Comparison and Amortization
Click "Compare common loan types" to see different loan terms. Click "Amortization" to track changes in principal, equity, and interest over the years.
How This Helps You
Decide the loan term that suits you. Consider if an adjustable-rate mortgage (ARM) makes sense. Determine if you're eyeing a home within your budget. Figure out the right down payment for you.
How Lenders Decide
Lenders look at your debt-to-income ratio (keep it around 36% or less).
What's in Your Monthly Payment
Principal (the amount you borrow). Interest (what the lender charges). Property taxes and homeowners insurance. Mortgage insurance if your down payment is less than 20%.
How to Lower Payments
Extend the loan term. Consider a smaller loan. Aim for a 20% down payment to avoid mortgage insurance. Try for a lower interest rate.
Watch Out for
Rising property taxes or insurance premiums. Late payment fees. Adjustable-rate mortgages if rates go up.
Formula for Monthly Payment
Monthly Payment (M) = Principal (P) × [ Monthly Interest Rate (i) × (1 + i)^n ] / [ (1 + i)^n – 1] Where i = Monthly Interest Rate (annual rate ÷ 12) and n = Total Number of Payments.
There you go! Play around with the calculator and see what works best for you. Happy house hunting!
