To finance a home purchase, most people require a mortgage. To estimate your monthly house payment, which includes principal and interest, property taxes, and insurance, use our mortgage calculator. You can experiment with different inputs for the down payment, home price, loan terms, and interest rate to see how your monthly payment would change.
Mortgage Calculator Results Explained
To use the mortgage calculator, enter a few details about the loan, including:
- Home price: The purchase price of the home.
- Down payment: The cash you pay upfront to buy a home, expressed as a percentage of the full loan amount. The size of your down payment can affect your interest rate—lenders typically offer lower rates if you make a larger down payment. (Default setting = 20%.)
- Loan term: The amount of time you have to repay the loan. In general, the longer the term, the lower your monthly payment, but the more interest you will pay overall. The shorter the term, the higher your monthly payment and the less interest you will pay. (Default setting = 30 years.)
- Loan APR: The cost to borrow the money, expressed as a percentage of the loan. Alternatively, enter your credit score range to see an interest rate estimate. (Default setting = last month’s national average.)
- Property taxes: The annual tax you pay as a real property owner, levied by your city, county, or municipality. (Default setting = the national average.)
- Homeowners insurance: Your annual cost to insure your home and belongings against theft, fire, natural disasters, personal liability claims, and other covered perils. Mortgage lenders require borrowers to buy home insurance coverage. If you live in a flood-prone area, your lender may also require flood insurance. And if you’re in an area that’s vulnerable to seismic activity, you may need earthquake coverage. (Default setting = the national average.)1
- HOA fees: The monthly amount you pay to your homeowners’ association (HOA), if the property you are considering has one, to help cover the costs of maintaining and improving the properties and amenities within the association.
Typical costs included in a mortgage payment
Your mortgage payment is largely comprised of principal and the interest. Here’s what that means, along with other definitions related to your loan:
- Principal: This is the amount you borrowed from the lender, effectively your home’s price minus the down payment.
- Interest: This is what the lender charges you to borrow the principal, or loan amount. Interest rates are expressed as an annual percentage.
- Down payment: This is the portion of the home’s price you’re not financing with a mortgage. For many borrowers, this is as little as 3 percent.
- Closing costs: Closing costs are one-time fees associated with getting a mortgage. They include the lender’s origination fee (if it charges one), recording fees and fees for settlement and title services. Altogether, these typically run 2 percent to 5 percent of the mortgage and are usually paid by or on the day the loan closes.
- Property taxes: This is the tax on your home levied by your city or town, paid for as long as you own it. If your mortgage lender requires an escrow account, you’ll pay a portion of your annual property tax bill with each monthly mortgage payment.
- Homeowners insurance: Your insurance policy helps protect you financially from damage related to covered events. If you live in a flood or other disaster-prone zone, you’ll be required to have additional coverage. As with property taxes, you’ll pay a portion of your annual insurance premium each month with your mortgage payment.
- Mortgage insurance: If you’re getting a conventional or FHA loan and your down payment is less than 20 percent of the home’s purchase price, you’ll pay mortgage insurance premiums, which are also added to your monthly payment.
How a Mortgage Calculator can Help You
Our mortgage calculator can help guide many of the decisions related to buying a home or refinancing your mortgage, such as:
- Whether you’re spending more than you can afford: Use the calculator to see how much you’ll pay each month, including in homeowners insurance premiums and property taxes. This can help you determine if you’re stretching your homebuying budget too far, or paying too much in terms of debt-to-income (DTI ratio).
- Whether your budget allows for a shorter-term loan: Use the calculator to compare the monthly payments and total interest between a 10-, 15-, 20- or 30-year loan. Shorter-term loans come with lower interest rates, but higher monthly payments.
- Whether you should put more or less money down: Use the calculator to weigh different down payment scenarios and how that’ll affect how much you’ll borrow and pay.
- Whether you should pay off your mortgage early: Use the calculator to learn how extra payments can impact how quickly you’ll repay the loan and any interest savings.
- When you can get rid of mortgage insurance: Use the calculator’s amortization schedule to determine when you’ll hit 20 percent equity — the magic number you need on a conventional loan to request that your lender remove private mortgage insurance (PMI).
Mortgage calculators are a crucial planning tool in your search for a home. They help you estimate the property price you can afford and the mortgage rates ideal for your financial position.
