Mortgage Calculator
Your Monthly Payment
$0
Principal & Interest
$0
Property Tax
$250
Insurance
$100
PMI
$0
Understanding Your Mortgage
Your mortgage payment typically consists of four components, often referred to as PITI:
- Principal: The amount that goes toward paying off your loan balance.
- Interest: The cost of borrowing money, calculated as a percentage of your loan.
- Taxes: Property taxes, which are typically held in an escrow account and paid by your lender.
- Insurance: Homeowners insurance, also typically held in escrow.
Many borrowers are also required to pay Private Mortgage Insurance (PMI) if their down payment is less than 20% of the home's purchase price.
Mortgage Tips
- A 20% down payment helps you avoid PMI and may secure better interest rates.
- Consider both 15-year and 30-year terms. Shorter terms have higher monthly payments but lower total interest.
- Your mortgage payment should ideally be 28% or less of your gross monthly income.
- Shop around with multiple lenders to get the best interest rate.
- Consider paying extra toward your principal to reduce the loan term and total interest paid.
How to Use Our Mortgage Calculator
Our mortgage calculator helps you estimate your monthly mortgage payments and understand the financial implications of your home purchase. Here's how to use it effectively:
- Enter the home price - This is the total purchase price of the property you're buying.
- Input your down payment - Either as a dollar amount or use the slider to set it as a percentage of the home price. Remember that a down payment less than 20% typically requires PMI.
- Select your loan term - Choose between 15, 20, or 30 years. Longer terms mean lower monthly payments but more interest paid over time.
- Set your interest rate - Enter the annual interest rate you expect to receive from your lender. You can use the slider for quick adjustments.
- Enter your property tax and insurance - These are annual amounts that will be divided by 12 to calculate their monthly contribution to your payment.
After entering these values, the calculator will automatically show your estimated monthly payment broken down into principal, interest, taxes, insurance, and PMI (if applicable). You can also view an amortization schedule to see how your loan balance will decrease over time.
Understanding Mortgage Calculations
Mortgage Payment Formula
The monthly principal and interest payment for a fixed-rate mortgage is calculated using this formula:
Where:
- M = Monthly payment
- P = Principal (loan amount)
- r = Monthly interest rate (annual rate divided by 12)
- n = Number of payments (loan term in years × 12)
Amortization Schedule
An amortization schedule shows how each payment is applied to the principal balance and interest, and how the loan balance decreases over time. In the early years of a mortgage, a larger portion of each payment goes toward interest. As the loan progresses, more of each payment is applied to the principal.
Private Mortgage Insurance (PMI)
PMI is typically required when your down payment is less than 20% of the home's purchase price. It protects the lender in case you default on the loan. PMI usually costs between 0.5% and 1% of the loan amount annually and can be removed once you reach 20% equity in your home.
Common Mortgage Types
Fixed-Rate Mortgages
A fixed-rate mortgage has the same interest rate throughout the entire term of the loan. This means your monthly principal and interest payments remain constant, providing predictability for budgeting.
Adjustable-Rate Mortgages (ARMs)
ARMs have an interest rate that changes periodically based on market conditions. They typically start with a lower fixed rate for a certain period (e.g., 5, 7, or 10 years) before adjusting annually. While our calculator is designed for fixed-rate mortgages, ARMs can offer lower initial payments but carry the risk of higher payments later.
FHA Loans
Federal Housing Administration (FHA) loans are government-backed mortgages designed to help first-time homebuyers and those with lower credit scores. They typically require a down payment as low as 3.5% but include mandatory mortgage insurance premiums.
VA Loans
Department of Veterans Affairs (VA) loans are available to eligible veterans, active-duty service members, and some military spouses. They often require no down payment and no PMI but do include a funding fee.
Mortgage Payment Tables
Below are tables showing monthly principal and interest payments per $100,000 borrowed at various interest rates and terms.
30-Year Fixed Rate Mortgage
| Interest Rate | Monthly Payment per $100,000 | Total Interest Paid |
|---|---|---|
| 3.0% | $422 | $51,920 |
| 3.5% | $449 | $61,640 |
| 4.0% | $477 | $71,720 |
| 4.5% | $507 | $82,520 |
| 5.0% | $537 | $93,320 |
| 5.5% | $568 | $104,480 |
| 6.0% | $600 | $115,920 |
15-Year Fixed Rate Mortgage
| Interest Rate | Monthly Payment per $100,000 | Total Interest Paid |
|---|---|---|
| 3.0% | $691 | $24,380 |
| 3.5% | $715 | $28,700 |
| 4.0% | $740 | $33,200 |
| 4.5% | $765 | $37,700 |
| 5.0% | $791 | $42,380 |
| 5.5% | $817 | $47,060 |
| 6.0% | $844 | $51,920 |