How to Use Our Free Online Monthly Mortgage Calculator
Using the online mortgage calculator is a relatively simple process. Here’s how you can use our calculator to estimate monthly payments:
- Enter your home’s price: In the Home price section, enter the cost of the house you’re purchasing (or the current value of your property if refinancing).
- Enter your downpayment: In the Down payment section, enter the amount of your down payment (if buying) or equity (if refinancing). You may enter either a dollar sum or a percentage.
- Enter the loan term: In the Loan Term section, enter the loan length, which is typically 30 years but can be 20, 15, or 10 years.
- Enter the interest rate: In the Interest rate area, enter the rate you intend to pay or are now paying. Our monthly mortgage calculator defaults to the current average rate; however, you can change the percentage.
- Enter your zip code: Enter your zip code in the space designated for it.
Click Update.
Zivak Realty Group’s monthly mortgage payment calculator can also evaluate property taxes, homeowners’ insurance, and homeowner association costs. You can change these amounts, or even set them to zero, while searching for a loan.
What’s Included in a Mortgage Payment?
Your monthly mortgage payment is a combination of principal and interest charges. Here’s a detailed breakdown of the costs involved and the other definitions related to your loan:
- Principal: It presents the amount of money borrowed from the lender. Principal is equivalent to the value of your home minus the down payment.
- Interest: This is the amount the lender charges you for borrowing the principal, or the amount of the loan. Interest rates are presented as yearly percentages.
- Down Payment: The down payment is the part of the home’s price that you are not financing with a mortgage. For many debtors, this is as little as 3%.
- Closing Costs: Closing expenses are one-time fees that come with securing a mortgage. They include the lender’s origination cost (if applicable), recording fees, and real estate title & closing expenses. These typically range from 2 to 5 percent of the mortgage and are usually paid by or on the day the loan closes.
- Property Taxes: This is a city or town-imposed tax on your house that you must pay for the duration of your ownership. If your mortgage lender demands an escrow account, you’ll include a percentage of your annual property tax bill in estimated monthly mortgage payment.
- Homeowners Insurance: Your insurance coverage protects you financially from damage caused by insured incidents. If you reside in a flood or other disaster-prone area, you must have supplementary coverage. You’ll pay a portion of your yearly insurance fee each month with your mortgage payment, just like you would for property taxes.
- Mortgage Insurance: If you acquire a conventional or FHA loan with a down payment of less than 20% of the home’s purchase price, you’ll have to pay mortgage insurance premiums, which are added to your monthly mortgage payments.
Estimated Monthly Mortgage Payment Formula
Planning to get an idea of the mortgage payment calculation? Here’s a mathematical breakdown to help you to get estimated monthly mortgage payment calculation manually:
M = P r (1 + r)n(1 + r)n – 1
Here’s a breakdown of the inputs
| M |
Total monthly mortgage payment. |
| P |
Principal loan amount |
| r |
It’s the monthly interest rates that you must divide by 12 (the number of months in a year) to calculate the monthly rate. If your interest rate is 5%, your monthly rate is 0.004167 (0.05 divided by 12). |
| n |
Number of payments throughout the loan’s life: To calculate the number of payments on your loan, multiply the number of years in the loan term by 12 (the number of months in a year). For example, a 30-year fixed mortgage would require 360 payments (30 x 12 = 360). |
This formula might help you calculate how much house you can afford. Alternatively, you may use this estimated mortgage payment calculator to help you plan your budget.
What Type of Mortgage Is Right for You?
Each case is unique, but here are some general guidelines for each type of mortgage:
30-Year Fixed Rate Mortgage: It is the most frequent choice for a mortgage. The 30-year fixed-rate mortgage has a lower monthly payment and remains stable.
15-year fixed-rate mortgage: Similar to the 30-year fixed-rate mortgage, this option allows you to pay off the loan in half the time, resulting in significant interest savings.
7-year ARM – ARM stands for adjustable-rate mortgage, which implies your interest rate may change after 7 years. In general, this is best employed if you anticipate staying in the property for fewer than 7 years, as the interest rate may rise beyond that time.
5-year ARM – The 5-year ARM is similar to the 7-year ARM; however, the interest rate may vary after the 5-year term.
FHA 30-year Fixed-rate Mortgages – It’s an excellent option for first-time homebuyers with poor credit scores. Additionally, it is a great alternative if you wish to make a smaller down payment.
VA Loans With a 30-Year Fixed Rate – Available to qualified veterans and active service members. The benefit of this financing is that no down payment is required, and PMI is avoided.
Jumbo Financing – It refers to lending amounts that transcend traditional loan limitations.
How to Lower Your Estimated Monthly Mortgage Payment
If the monthly mortgage payment shown in our calculator appears too high, you can try several strategies to lower it. Experiment with a couple of these variables that help you to lower your estimated monthly mortgage payment.
- Select an extended loan – A longer term lowers your monthly mortgage payment (but increases your interest rate throughout the life of the loan).
- Spend less on your house – Borrowing less leads to a lower monthly mortgage payment.
- Look for a lower interest rate – You don’t need to receive your mortgage from your bank. Comparing offers from multiple lenders will help you secure the best rates.
- Make a larger down payment – This is another method for reducing the size of the debt.
How A Mortgage Calculator Can Help You
Our free online mortgage payment calculator can assist with many of the considerations associated with buying a property or refinancing your mortgage, such as:
Whether you are spending more than you can affordÂ
Use the free online mortgage payment calculator to see how much you’ll spend every month, including homeowners’ insurance premiums and property taxes. This mortgage calculator might help you evaluate whether you’re overspending on your home-buying budget or paying too much in debt-to-income (DTI) ratio.
Whether your budget permits a short-term loanÂ
Use the estimated mortgage payment calculator to compare monthly payments and total interest rates for 10-, 15-, 20-, and 30-year loans. Short-term loans offer lower interest rates but greater monthly payments.
Should you put down more or less money?Â
Use the online mortgage calculator to compare different down payment options and see how they affect the amount you borrow and the payments you make.
Should You Pay Off Your Mortgage Early?Â
Use the monthly mortgage repayment calculator to see how extra payments affect how soon you repay the loan and any interest savings.
When can you get rid of mortgage insurance?Â
Use the mortgage calculator’s amortization plan to calculate when you’ll reach 20 percent equity, which is the magic figure required on a conventional loan to request that your lender eliminate private mortgage insurance (PMI).
