When it comes to homeownership, a mortgage is, of course, the main expense. You have to predict how much you are going to spend each month, or monitor what your current expenses are. This calculator will show you where your payment is addressed, differentiating among principal amount, interest, and other crucial home-related costs such as homeowner’s insurance, property taxes, and fees.

It is recommended that you begin your search with a mortgage payment calculator tool like this, so as to have a clear vision of how much a home loan will actually cost you. However, you may want to consider financial counseling, especially if you are not quite in good standing. Mortgage affordability will also depend on other upcoming necessary costs for needs not related to housing: education, utility bills, emergency funds, etc.

The main focus should be obviously on choosing the lowest rate possible. Even a rate difference of 0.25% among different mortgages would mean five figures left on the lender’s table, especially for longer loan terms.

How a mortgage payment calculator can turn useful to you?

The mortage payment calculator can serve the purpose in both the potential scenarios: you have a current mortgage and desire to take control of your finances, or in the most common case you are a prospective first-time homebuyer basically guessing if you can afford your dream house.

Besides figuring out your monthly payments according to a selected rate you are comfortable with, some further applications may sound interesting to you:

– Verifying what your payments result by changing the loan term, and how much you can save on interest, for instance matching a 30-yrs with a 15-yrs term mortgage.

– Comparing two mortgage scenarios. You can make a side-to-side comparison of two loans, whether the offers come from the same lender or different ones.Another case is if you have to choose between two houses price you have seen and liked, to understand which is the most feasible for your finances. Or even, see how your payments will differ for the same house with different amounts of down payment.

– Using the amortization table to predict what your payments will be at a certain date, that could prove to be of tremendous help especially if you are planning future expenses: a complete mortgage payment calculator must have this feature.

Furthermore, have a look at it once you have reached 20% of home equity (aka 80% of your mortgage payment): at that point, you can get rid of PMI, which is an important mortgage cost. You will have the right to claim your lender to waive the PMI requirement at the date when the principal balance of your mortgage would correspond to 80% of the original value of your home, provided you regularly paid your installments.

– Helping you figure a rough quick estimate of extra costs: you will obtain an average insurance cost and expected property tax based on your State by inputting the ZIP code in the appropriate field.

How to use this calculator?

The main function of this mortgage payment calculator is to show you how much your monthly payment will be over the loan lifetime, as well as to keep track of your balance over the months and years to come.

A fixed-rate mortgage is the most common signed loan by homebuyers. All the estimations are made assuming a fixed rate. If you will choose a variable rate (known as ARM: Adjustable Rate Mortgage), you can still use this tool: select the term during which the rate is yet fixed, then repeat the calculation with the new rate for the remainder term.

Playing with the amount of down payment, you will see how much the interest will account for the cost of the loan: for instance, it may be worth saving for a bigger down payment, to reduce the overall mortgage cost.

With your mortgage offer numbers on hand, you just have to input all the known parameters, clicking on the advanced options, and choosing the home insurance rate you are paying, property tax, HOA fees, and contingent PMI.

In case you are in the early stage of visiting houses or in the process of buying, deciding among different properties, then our tool will be also useful: you might don’t know a few things about your home, for instance, how much your interest rate or property tax will be. Being the case, you may just have a look at today’s rates (or asking your real estate agent), and specify your ZIP code: homeowners insurance and the tax amount will be automatically inferred, and be close to the actual costs so that you will have a complete estimate of the total payments included in your future mortgage.

PMI (Private Mortgage Insurance) is a further cost of a conventional mortgage, that will count into the monthly payments if you couldn’t put down at least 20% of your home’s value. In our calculator, it is automatically set based on your down-payment amount: for a default 20% of your home value in advance, your PMI will be zero; if instead, you can only put down a minor percentage, PMI will be estimated for the loan-to-value-ratio (LTV), as it is done from a mortgage lender.

What about extra mortgage costs?

– Homeowner’s insurance: as a warranty for their asset of investment, nearly every lender will require that you have coverage for at least your home purchase value, to consider closing the mortgage contract. You can decide to pay it apart, or to escrow your monthly installments into the mortgage account: by inputting your insurance premium, you are assuming the latter option. If you don’t know how much is it, we give you a quick (average) estimate based on your ZIP code; if you prefer to consider a more precise home insurance quote, have a look at our home insurance companies section.

– HOA (Homeowner’s Association) fees are paid if your house is within a community, a condo for instance, that sets its own rules for administering a group of properties, sharing the same spaces, safety conditions, general upkeeping, or still about parking and use of common areas. HOA fees are then used as a fund to guarantee a set of services. The amount of such fees vary greatly depending on where your home is located; you’ll have to manually input your HOA fee.

– Property tax: a cost due to the government, whose amount depends and varies considerably on home value and location, being it in an average range of 0.3% to 2% of your home purchase value. It is a real estate overall tax paid on an annual basis, and regularly included in your mortgage payments, but separate from the principal. The property tax estimation in this calculator is just a weighed average based on your ZIP code.

Other things to consider

To recap, your mortgage payments include always:

– Principal

– Interest

– Property taxes (and in some cases HOA fees)

– Homeowner’s insurance

– PMI (Private Mortgage Insurance), if your down payment is below 20% of the home purchase value.

On top of the mortgage, there are non-recurring expenses to be factored in, such as closing costs, eventual moving expenses, initial renovations you may want to do prior to living into your new house, house maintenance.

Closing costs are the ones due to end the mortgage process. They are not included in the mortgage, but represent a significant upfront amount: they can vary in a range of 2-5% of the entire loan, which means thousands of dollars. They are set depending on the lender, home location, type of mortgage, and can be negotiated with the seller, who can choose to share them partially.

Another factor we can’t account for in our calculator is the eventual tax deduction of mortgage interest: it must be mentioned that these returns can at least partially counterbalance the plus represented by closing costs.

Again, if you want to make a realistic budget, please keep in mind considering the further expenses for moving, buying new interiors, emergency repairs, etc.

If you can afford to do early repayments with the intent of accelerating the mortgage payoff, most lenders apply prepayment fees, that are calculated as a percentage of the total loan, or as a flat dollar amount. Anyway, this practice is good not only for taking yourself “out of debt” earlier but also in making you save on interest the more bulky are those payments.

Then, you have it. Please share this tool if you find it useful.