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Mortgage Calculator
A mortgage amortization calculator estimates how much of a monthly mortgage payment can go toward principal and interest over the life of a loan. This calculator can also let you see how much the monthly cost of homeownership may change depending on property taxes, insurance and HOA fees.
A mortgage amortization calculator estimates how much of a monthly mortgage payment can go toward principal and interest over the life of a loan. This calculator can also let you see how much the monthly cost of homeownership may change depending on property taxes, insurance and HOA fees.
How to use our mortgage calculator
In addition to the obvious way to use our mortgage calculator -- simply plugging in a loan amount, interest rate, and other parameters to determine a likely monthly mortgage payment -- there are a few other valuable ways to use the tool.
Calculate multiple scenarios
What would it do to your mortgage payment if you put 25% down instead of 20%? What if you decided to live in a lower-tax state? How much more would it cost you each month if you wanted to stretch your homebuying budget by $20,000? And how much would you save by refinancing a mortgage?
There are just a few examples of the scenarios you can use our mortgage calculator to explore. When you're starting the homebuying process, exploring some of the "what ifs" will give you a better idea of how different parameters affect your monthly out-of-pocket expenses.
Compare different loan types
In addition to all of the potential hypothetical homebuying scenarios, you can also compare different types of mortgages. For example, if you can easily afford the payment on a 30-year fixed-rate mortgage, could you get a 20-year loan instead? (Hint: The monthly payment difference might be less than you think.)
Determine what you can afford
Finally, you can use our mortgage calculator to work out how much house you likely can afford. Let's say that you can afford an all-in monthly mortgage payment (including taxes, insurance, and HOA dues) of $1,500 per month. This mortgage calculator can show you what home price that could translate to.
How do I calculate my monthly mortgage payment?
You can certainly calculate a monthly mortgage payment by hand if you want to, but the formula is a bit complex. Here's a quick look at the formula to calculate a monthly mortgage payment on a loan amortized over a certain number of months:
For a $200,000 mortgage at 4% interest for 30 years, you would use a rate of 0.04 and 360 months, respectively, in the calculation.
Also keep in mind that this only calculates your principal and interest loan payment. You'll need to add the other monthly expenses that are ordinarily paid along with your mortgage (property taxes, insurance, and HOA fees, for example) in order to determine your total monthly payment.
With that in mind, we think it's much easier to use our free mortgage calculator to figure out what your mortgage payment should be. Not only can you calculate a mortgage payment but you can also compare different scenarios and get an idea of how much you can afford to spend.
Monthly mortgage payment costs
One common misconception, especially among first-time homebuyers, is that your mortgage payment is only the principal and interest you're required to pay to your lender each month.
In virtually all cases, if you have a mortgage on your home, you'll be required to pay certain additional costs to your lender on a monthly basis. Here are some of the components of a typical mortgage payment as well as other factors that determine how much you'll have to send to your lender each month.
Home price
The most obvious determining factor that makes up your mortgage payment is the price you pay for your home. In other words, with all other factors being equal, the mortgage payment on a $200,000 home can be expected to be roughly double the monthly payment on a $100,000 home.
Down payment
The more money you pay for your home upfront, the less you'll have to finance, and the lower your monthly mortgage payments will be. The portion of your home that you pay for at closing is known as the down payment. A down payment equal to 20% of the sale price of the home has been the industry standard for decades, but it's not too difficult to find a loan that requires significantly less money up front. And depending on your personal situation, you might even be able to find a mortgage with no down payment requirement whatsoever.
Interest rate
The interest rate you get can have a major influence on your mortgage payment. For example, let's say that you're purchasing a $250,000 home with a 20% down payment, so you're obtaining a $200,000 30-year fixed-rate mortgage. Here's a look at what various mortgage interest rates would do to the principal and interest (P+I) portion of your mortgage payment:
Mortgage type
Will you obtain a 30-year mortgage like the majority of homebuyers do, or will you opt for a 15-year or some other term length? Will you choose a fixed interest rate, or does an adjustable-rate mortgage (ARM) better suit your needs? The type of mortgage you select is a major factor in determining your monthly payment amount.
Home insurance
Insurance is one of the expenses that you'll typically need to pay along with your monthly mortgage payment. In a nutshell, you'll pre-pay a certain amount of your anticipated insurance costs (say, six months) at closing into an escrow account with your lender. Then, you'll pay one-twelfth of your annual insurance premium into escrow along with every monthly mortgage payment. When your insurance is due each year, your lender will pay the bill on your behalf.
The idea is that if you don't make your mortgage payments, the lender will foreclose and essentially become the owner of your home. So in order to protect itself and make sure your home is protected, your lender wants to ensure that your insurance is paid.
In most parts of the United States, you'll just need a basic homeowners insurance policy, but if you live in certain high-risk areas, that might not be enough. For example, it's quite common for lenders to require flood insurance for borrowers whose homes are in low-lying coastal areas.
Property tax
Like insurance, property taxes are typically paid to the lender, and the lender then pays the annual or semi-annual property tax bill on behalf of the borrower. Collectively, your principal and interest along with taxes and insurance are often referred to as PITI.
This not only gives the lender assurance that the property won't be subject to any tax liens for unpaid property taxes, but it also can make paying the property tax bill easier on the borrower as opposed to making one lump sum payment.
Property taxes can vary dramatically by location, so it's important to take them into account when calculating your expected mortgage payment.
Homeowners association fees
If a home is located in a neighborhood with a homeowners association (HOA) or a condo association, the HOA dues are often also included in the monthly mortgage payment to the lender.
Note that the inclusion of HOA fees in a monthly mortgage payment isn't nearly as universal as property taxes and insurance, but if you live in a community with an HOA (or are planning to), it's important to consider this cost for budgeting purposes.
Private mortgage insurance (PMI)
Finally, if you put less than 20% down when purchasing your home, you'll likely have to pay mortgage insurance. With conventional loans, you'll pay private mortgage insurance, or PMI. If you have an FHA loan, you'll pay FHA mortgage insurance, which helps cover the government's guarantee of your loan.
Some types of loans don't require PMI. VA mortgage loans are the most common example, but there are loan programs from certain mortgage lenders that also offer no PMI on loans even with little or no down payment.
