Ready to buy a house but want to get an idea of how much you can afford before you apply for a mortgage? Play with the numbers in our free mortgage calculator.
Use this simple mortgage calculator to get an estimate of what your monthly payments might look like or calculate how your down payment impacts what you pay over time.
Ready to buy a house but want to get an idea of how much you can afford before you apply for a mortgage? Play with the numbers in our free mortgage calculator. Use this simple mortgage calculator to get an estimate of what your monthly payments might look like or calculate how your down payment impacts what you pay over time.
These calculations are tools for learning more about the mortgage process and are for educational/estimation purposes only. Calculator results are rounded down to the nearest dollar. Payment shown includes taxes and insurance (if entered into scenario) and mortgage insurance (if applicable). This does not constitute an offer or approval of credit. Contact a PrimeLending home loan officer for actual estimates.
For example, a Conventional fixed rate loan with the following terms: purchase price of $400,000, loan term of 360 months, down payment of 20%, and an interest rate of 7.625%, will result in an annual percentage rate of 7.722%. Rate pulled 05/01/24, rates subject to change. Loans are subject to borrower qualifications, including income, property evaluation, and final credit approval.
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Based on the numbers you provided, here is your mortgage estimate. Want to see other options? Just enter new numbers to calculate and compare.
How To Calculate a Mortgage Payment
One of the best ways to plan for homeownership is to use a mortgage calculator to help you anticipate what a mortgage might cost you. A monthly mortgage payment is calculated using home price, your down payment, expected interest rate, loan term, annual property taxes and annual home insurance. You can use our free house loan calculator to crunch the numbers and get an idea of what your mortgage payment might look like. If you need direct help, click here to call and talk directly with a loan expert.
Here's How the Mortgage Calculator Works
- If you know how much the house you want to buy costs, enter that number in the “Home Price” line. Or you can put an estimated home price if you don’t have a specific house in mind yet.
- Your down payment is what you pay up front when buying a home. Contrary to popular belief, you don’t always have to put down 20%. You can either enter a dollar amount or a percentage in the “Down Payment” section of the calculator above.
- In the “Interest Rate” box, enter the mortgage interest rate that you expect you will pay. If you aren’t sure, contact your local PrimeLending loan officer to get an idea of what mortgage rates in your area are.
- 4. The “Loan Term” section is where you will enter the length of your loan or how many years you want to have a mortgage for. Common loan term lengths are 15 or 30 years, but there are more options available to you depending on the mortgage you choose.
- 5. You will also need to include your expected annual property taxes and annual home insurance. These costs can be entered into their respective boxes in the mortgage calculator above.
The calculator will also show the typical costs that are included in your monthly mortgage payment and what portion of your payment they are. These costs include the combined principal and interest, monthly property taxes and monthly home insurance. For some borrowers, private mortgage insurance (PMI) may also be included if they have a conventional loan and put down less than 20%.
Over time, repaying your mortgage will lead to amortization or the gradual reduction of mortgage debt through regularly scheduled payments.
How to pay off a mortgage faster
For homeowners who want to pay off their mortgage faster, possibly saving on interest paid, there are several options available to pay off your mortgage early. Common ways to pay off a mortgage faster include:
- Try bi-weekly payments — Instead of making one payment each month, try splitting it in half and making two bi-weekly payments. Doing so could lead making the equivalent of one extra full payment in the year. Try our free bi-weekly payment calculator to how early you may be able to pay off your mortgage.
- Pay a little extra — If you have the room in your budget, make an extra payment toward the principal. Since the amount you pay in interest is based on your principal balance, the quicker you can lower your principal the less you will pay in interest over time, potentially saving you hundreds over the life of your loan. Get an idea of what you may be able to save with this free extra payments calculator.
- Consider a refinance — Are you able to afford a higher loan payment today than when you closed your loan? You could refinance your current mortgage to one with a shorter term so that you spend fewer years making mortgage payments. Check out your refinance loan options here or talk to a mortgage expert to learn more.
What is amortization on a mortgage?
Amortization on a mortgage is the result of paying off the principal and interest of the loan over time. The amortization occurs based on your mortgage amortization schedule or amortization table which outlines the dates and amounts of each payment. How amortization works on a mortgage will vary from borrower to borrower based on their loan type and mortgage terms.
You can use an online mortgage amortization calculator like the one above to get an idea of what your amortization schedule may look like. Once you have calculated your mortgage payments, click the “interest and principal breakdown by year” banner to drop down the amortization table. If you already have a mortgage, borrowers can also request the amortization table for their mortgage from their lender.
What are the costs associated with a mortgage payment?
When you get a mortgage, there will be other costs associated with your monthly mortgage payment. These can include what you owe on the principal, your interest payment, mortgage insurance, property taxes and homeowners’ insurance.
- Principal — This is the amount you borrow to buy a home and what you will pay back in monthly installments.
- Interest — This is what it costs to borrow the principal amount of your mortgage and is added on as a percentage of what is owed.
- Property Taxes — While property taxes aren’t part of what you pay back in your mortgage payment, it is a fee that occurs monthly as a property owner. Property taxes will be listed on your mortgage statements if you have an escrow account for it.
- Mortgage Insurance — If your down payment is less than 20% there is a probability of you having mortgage insurance tacked onto the cost of your mortgage.
- Homeowners’ Insurance — Also not part of your mortgage payment, homeowners’ insurance is a monthly fee that covers your property, home and personal assets inside the home. Homeowners’ insurance will be listed on your mortgage statements if you have an escrow account for it.
Another cost associated with getting a mortgage is the origination fee. An origination fee is a one-time fee charged by a lender for processing your loan. On average, the origination fee costs 0.5% to 1% of the loan amount.
How is mortgage interest calculated?
Mortgage interest is calculated as a percentage of the principal loan balance that you pay to borrow that money as determined by your interest rate. So, the lower your interest rate the less you will pay in interest on your mortgage over time.
If you are looking for an interest-only calculator, our mortgage calculator above breaks down your interest and principal by year. Simply click the “interest & principal breakdown by year” banner under the “home loan info” box to see the complete payment schedule that is calculated.
How does mortgage interest work?
Mortgage interest rates vary from loan to loan and person to person based on a number of by personal and market factors such as credit history, income, down payment, inflation, and Federal bond yield fluctuations. So, your specific interest rate will be different than the next borrower’s interest rate, even if they have the same type of loan.
In general, mortgage interest works in two different ways as either fixed or adjustable. A fixed mortgage rate will remain the same throughout the life of your loan. An adjustable mortgage rate will, after a set initial fixed rate period of time, fluctuate with market rates according to the terms of your mortgage.
When in doubt, always talk to a mortgage professional about your specific mortgage needs. Contact us to start a conversation.
