How to calculate your mortgage payment
Our mortgage payment calculator estimates how much you might pay each month for principal and interest, taxes and insurance, and PMI if required. Change the default values to personalize your estimate!
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About our monthly mortgage payment calculator
Our mortgage payment calculator estimates how much you might pay each month by taking into account the purchase price of the home, the down payment, the interest rate, the cost of taxes and insurance, and other factors.
The calculator doesn’t include the cost of homeowners association (HOA) fees you might have to pay if the home is part of a housing community or condominium building. It also does not consider the cost of maintenance and repairs that come with owning a home or the cost of other monthly debt payments you might have. For an estimate of home purchase prices to consider, check out our home affordability calculator.
The price of the home you buy is the largest single factor affecting your mortgage payment. More expensive homes typically come with larger payments for principal and interest. More expensive homes often have higher property taxes and insurance costs too, which are included in your monthly mortgage payment. The cost of private mortgage insurance (PMI) is also based on your loan amount. That means when your loan requires you to pay for PMI, more expensive homes might increase the cost of this insurance.
Your down payment affects your monthly payment two ways. The first is by affecting the amount of your principal loan balance. When you make a larger down payment, you need to borrow less money to buy a home which can help lower your monthly payment.
The second is by affecting whether you are required to pay for private mortgage insurance. When you make a down payment of less than 20% with a conventional loan, you will be required to pay for mortgage insurance. When you make a down payment of 20% or more, you usually can avoid paying for PMI.
Our mortgage payment calculator takes your down payment into account. When you make a down payment of less than 20%, the calculator will add an estimate of the cost of PMI to the estimate of your monthly mortgage payment. When you make a down payment of more than 20%, the calculator removes this estimate.
Mortgage insurance requirements and costs are different for VA and FHA loans. To better understand these costs, speak to a Freedom Mortgage loan advisor.
Your mortgage’s “term” is the number of years you have to pay the loan back. For example, a 30-year mortgage gives you 30 years to pay the loan off. Mortgages with longer terms can have lower monthly payments. That’s because you are paying back the loan over a longer period of time. Mortgages with shorter terms (such as 15 or 20 years) often have higher monthly payments. However, these shorter-term mortgages often have lower interest rates than their 30-year counterparts and, obviously, can be paid off more quickly. Thus, depending upon how long you keep a shorter-term mortgage, you may save quite a bit of money in interest versus a 30-year mortgage.
Your interest rate is the cost of borrowing money expressed as a percentage. Your interest rate has a significant impact on your monthly mortgage payments. A higher rate will cost you more money per month. A lower rate will cost you less.
Most lenders will require you to make monthly payments toward your property taxes as part of your mortgage bill. This money is kept in an escrow account until the taxes are due. As a result, your monthly mortgage payment can be affected by the property tax rate in the community where you buy your house. The purchase price of the house often affects the cost of your property taxes as well, with more expensive homes typically having higher taxes than less expensive homes.
Most lenders will require you to buy homeowners insurance and to make monthly payments toward your premiums as part of your mortgage bill. This money is kept in an escrow account until the premium payments are due. As a result, your monthly mortgage payment can be affected by the cost of your homeowners insurance. Shopping for the right rates, coverage, and deductibles for you might save you money on these insurance costs.
Our mortgage payment calculator estimates how much you might pay each month to buy a house. The calculator does not estimate if this payment is affordable, however. When you are thinking about your monthly mortgage payment, also think about the cost of other monthly bills and debt payments you may have. Think about expenses for things like food and clothing. And think about the cost of other financial goals you might have, such as building up a rainy day fund, saving for retirement, or saving for college.
One way to think about mortgage affordability is to calculate your debt-to-income ratio (DTI). You can calculate your DTI by taking the total of your monthly debt payments, dividing this total by your monthly gross income, and expressing the results as a percentage. For example, if your monthly debt payments total $1,500 and your monthly gross income is $5,000, then your DTI is 30%. (That is $1,500 ÷ $5,000 = 0.30 or 30%.)
Financial professionals often recommend you try to keep your DTI under 36%. This helps ensure you have enough money in your monthly budget to pay for your other expenses. Keeping your DTI at 36% or less can also help improve the chances of getting your mortgage approved. That’s because many lenders want their customers to have a DTI of 36% or less. When lenders calculate your DTI, they typically include the cost of your mortgage payment plus other payments you might have for car loans, student loans, credit cards, and other debts.
Freedom Mortgage Corporation is not a financial advisor. The ideas outlined above are for informational purposes only and are not investment or financial advice. Consult a financial advisor before making important personal finance decisions, and consult a tax advisor for information regarding the deductibility of interest and charges.