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Mortgage Calculator

# Calculate How You Can Save Money on Your Mortgage

10-year Treasury Notes are connected to mortgage rates. When mortgage rates drop, it presents an excellent opportunity for refinancing your mortgage.

Home price
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Down payment
The down payment is the portion of the sale price of a home that is not financed. The amount of the down payment can affect the interest rate you get, as lenders will typically offer lower rates for borrowers who make larger down payments.
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Length of loan
The loan term is the amount of time or number of years that you will have to repay a loan. Longer term mortgages can make the amount you pay each month smaller as opposed to shorter term loans, by stretching out your payments over more years.
Interest rate
The interest rate is the amount you’ll pay each year to borrow the money for your loan, expressed as a percentage.
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Zip code
Credit score
Property tax
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Homeowner's insurance
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HOA fees
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Show advanced options

Your estimated monthly payment

Payment breakdown

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Monthly payment

How is my monthly payment calculated?

Principal & interest
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Homeowner's insurance
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Property tax
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HOA fees
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Total monthly payment = \$0

Calculating Mortage Payments

It’s important to know how much your monthly mortgage payments will be. You can use the mortgage payment formula to manually calculate your approximate monthly mortgage payments.

Monthly Mortgage Payment Calculator
The monthly mortgage payment formula can help you determine your house budget. The formula is:

M = P[r(1+r)^n/((1+r)^n)-1)]
M= The monthly payment for your mortgage

P= The principal loan amount

r= Monthly interest rate. Divide your annual interest rate by 12 to find your monthly rate. For example, if your annual interest rate is 4.8%, then your monthly rate is (.048/12=.004).

n= Total number of payments over the lifetime of the loan. To find this number, multiple the number of years in the loan term by 12. This gives you the total payments in your loan. A 15-year fixed mortgage would have 180 payments.

While the formula is a helpful way to estimate your monthly payments and figure out how much house you can afford, our mortgage calculator makes the process even easier. You can adjust the values in the mortgage calculator to determine if you should adjust your loan term. Always evaluate quotes from several lenders to ensure you receive the best deal on your loan terms.

Benefits of a Mortgage Calculator

Purchasing a new home is a life-changing experience that you want to make carefully. Closely evaluating your financing will help you set a smart budget. Understanding what you can afford will guide your home search and help you stay on track. A mortgage calculator is one of the best tools you can use during this process.

Mortgage payments include four different components. The components, known as PITI, are the principal, interest, taxes, and insurance. Even those who know these concepts do not realize the true expense of homeownership. For example, you must also consider utility bill increases, major repairs, homeowners association fees, private mortgage insurance, routine maintenance, and more.

Our mortgage calculator will help you assess PITI and HOA fees, but the other additional homeownership costs will vary based on the home you choose. The monthly payment you can afford based on the mortgage calculator should not be at the absolute top of your budget. You’ll still want to have enough in your budget to handle the other unexpected expenses of owning a home.

Use the calculator to examine how different loan terms impact your monthly payment. You can adjust the down payment amount, loan term, and interest rate with the calculator. Keep in mind that your interest rate depends on your debt-to-income ratio (the sum of all debts including the new mortgage divided by your gross monthly income). The greater risk you present to a lender, the higher your interest rate will be.

The Bankrate Mortgage Loan Calculator can help you factor in PITI and HOA fees, but not other expenses, so make sure the monthly payment it computes for you isn’t the absolute maximum of what you’ll be able to afford. It’s important to have some cushion in your budget for unexpected or emergency costs. You also can adjust your loan and down payment amounts, interest rate, and loan term to see how those variables affect your monthly payment. Your specific interest rate will depend on your overall credit profile and debt-to-income ratio, or DTI, which is the sum of all of your debts and new mortgage payments divided by your gross monthly income.

A lower credit score and higher DTI can make you a riskier borrower in lenders’ eyes. Generally, the riskier you seem on paper, the higher your interest rate will be.

How Much House Can You Afford?

The mortgage calculator can help you figure out how much house you can afford. Financial advisors often recommend that people should spend no more than 28% of their gross income on housing, including a mortgage payment. The total for all debts, including mortgage payments, student loans, medical bills, and more, should not exceed 36%.

Imagine Susie makes \$72,000 per year, with a gross monthly income of \$6,00 per year.

\$6,000 X .28= \$1,680. This is the most Susie should spend on the total monthly mortgage payment.

Qualifying for a high DTI ratio does not automatically mean you should take it. Even if you can get a mortgage with a DTI ratio of 50%, you have to consider what you’ll have left for savings, living expenses, retirement funds, and emergencies. Lenders won’t consider your budget when pre-approving you, so you must factor in your total budget when determining how much house you can afford.

Knowing what you can afford helps you make smart choices. When you use the mortgage calculator to help you determine your house-hunting budget, you can look at realistic homes that suit your budget.

What’s Next?

Using a mortgage calculator helps you understand your estimated monthly mortgage payment. After assessing the numbers, it’s time to get preapproval from a lender.

The lender will vet your income, credit, and finances to give you a better idea of how much house you can afford. You will also get a clearer picture of the total closing costs.

Compare Loan Rates

Other Ways to Use a Mortgage Calculator

While most people use a mortgage calculator to evaluate monthly mortgage payments for new loans, there are many other helpful ways to use the calculator.

Some of the other mortgage calculators use include:

Early mortgage pays off. Looking to shorten your loan term and pay off your mortgage early? Use the calculator to see how you can pay off your loan early with increased monthly, annual, or one-time payments. Click the “Amortization/Payment Schedule” link and enter in a monthly, yearly, or one-time amount. Select “Apply for Extra Payments” to see how much you’d save on interest by paying off your loan early.

Determine if an ARM is a smart choice. Adjustable-rate mortgages have an initially low interest rate that’s enticing. ARM may be a good option for certain buyers, but oftentimes the lower initial interest rate does not lower monthly payments as much as you’d hope. Additionally, buyers will then face higher interest rates later on. Enter the ARM interest rate in the mortgage calculator with a 30-year term. Compare the payments you see with a traditional 30-year fixed mortgage. This will give you a good idea if the ARM is worth it for you.

Choose the best time to get rid of private mortgage insurance. Once you have 20% equity in your home, you can request a wave on the private mortgage insurance requirement. Homebuyers who put less than 20% down on their home will have to pay the additional private mortgage insurance fee every month on top of the regular mortgage payment. After you have 20% equity, the private lender insurance fee goes away.

To find out when you’ll have 20% equity in your home, enter your original mortgage value and closing date. Then, click “Show Amortization Schedule.” Multiply your initial mortgage amount by .8. Find the number on the far-right of the amortization schedule that’s closest to .8 of your mortgage. That is when you will have 20% equity.

Mortgage Calculator Terms

Here is the information you need to use a mortgage calculator:

Home Price. The price of the home is the dollar amount.

Down Payment. How much money you give to the home’s seller upon buying. A 20% down payment is common, and it helps you avoid mortgage insurance.

Mortgage Amount. New buyers can find the mortgage amount by subtracting the down payment from the cost of the home. Refinancers should look at the remaining balance of the mortgage.

Mortgage Term. This term length is years for the mortgage. The most common mortgage term is 30 years, and this long term allows for lower monthly payments. Refinancers may choose a shorter loan term, like 15 years. Ultimately, the shorter loan term allows the borrower to save money on interest, but the monthly payments will be higher.

Interest Rate. Check the mortgage rate table for your location to estimate your interest rate on a new mortgage. Keep in mind that your interest rate in real life may vary based on your financial and credit profile.

Mortgage Start Date. Select the date when your mortgage payments will start.