Mortgage Calculator
| Home Price | $400,000.00 |
|---|---|
| Loan Amount | $320,000.00 |
| Down Payment | $80,000.00 |
| Principal & Interest | $2,022.62/mo |
| Property Tax | $280.00/mo |
| Homeowner's Insurance | $66.00/mo |
| Private Mortgage Insurance | $0.00/mo |
| HOA Fees | $0.00/mo |
| Number of payments | 360 |
| Total interest | $408,142.36 |
| Total of 360 mortgage payments | $852,702.36 |
Amortization Schedule
| Year | Total Payments | Principal | Interest | Ending Balance |
|---|
Calculate monthly mortgage payments, total interest, and amortization schedules for home loans with detailed payment breakdowns and comparison tools.
Understanding Mortgage Calculations
A mortgage calculator is essential for home buyers to understand their monthly payment obligations and total loan costs. It helps you determine affordability, compare loan options, and plan your home buying budget effectively.
Home Buying Planning: Use this calculator to determine what monthly payment fits your budget before house hunting. Input different home prices, down payment amounts, and interest rates to see how each affects your monthly payment. This helps you set a realistic price range and avoid overextending financially.
Loan Comparison: Compare different mortgage options including 15-year vs 30-year loans, fixed vs adjustable rates, and various down payment scenarios. The calculator shows how different terms affect both monthly payments and total interest paid over the life of the loan.
Financial Planning: Understanding your mortgage payment helps with overall financial planning. Factor in property taxes, insurance, and PMI to get a complete picture of homeownership costs. Use the results to plan your budget and ensure you maintain healthy finances after purchasing.
How is the monthly mortgage payment calculated?
The monthly mortgage payment is calculated using the loan amount, interest rate, and loan term. The formula used is:M = P[r(1+r)^n]/[(1+r)^n-1], where:
- M = Monthly payment
- P = Principal loan amount
- r = Monthly interest rate (annual rate divided by 12)
- n = Total number of payments (loan term in years × 12)
What is included in a mortgage payment?
A typical mortgage payment consists of four components, often referred to as PITI:
- Principal: The amount that goes toward paying off your original loan balance
- Interest: The cost of borrowing money from the lender
- Taxes: Property taxes collected and held in escrow
- Insurance: Homeowners insurance and, if applicable, private mortgage insurance (PMI)
How does the down payment affect my mortgage?
A larger down payment reduces your loan amount, which lowers your monthly payment and the total interest paid over the life of the loan. Additionally:
- Down payments of 20% or more typically eliminate the need for PMI
- Larger down payments may help you qualify for better interest rates
- A smaller loan-to-value ratio reduces the lender's risk
What is amortization?
Amortization is the process of paying off your mortgage through regular payments over time. In the early years of your mortgage, a larger portion of each payment goes toward interest. As time passes, more of each payment goes toward reducing the principal balance. The amortization schedule shows this breakdown for each payment throughout the life of the loan.
Should I choose a 15-year or 30-year mortgage?
The choice between a 15-year and 30-year mortgage depends on your financial situation and goals:
- 15-year mortgage: Higher monthly payments but lower total interest cost and faster equity building
- 30-year mortgage: Lower monthly payments but higher total interest cost over the life of the loan
Use our calculator to compare both options and see which aligns better with your budget and financial goals.
How do interest rates affect my mortgage?
Even small changes in interest rates can significantly impact your monthly payment and total loan cost. A lower interest rate means:
- Lower monthly payments
- Less total interest paid over the life of the loan
- Potentially qualifying for a larger loan amount with the same monthly payment
Our calculator allows you to compare different interest rate scenarios to see their impact on your mortgage.